Bitcoin – 'like a charging train with no brakes' – zooms past US$15,000

December 7, 2017 | By | Reply More

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LONDON: Bitcoin rocketed above US$15,000 (RM61,200) for the first time today, after adding more than US$2,000 to its price in less than 12 hours.

Bitcoin, the world’s biggest and best-known cryptocurrency, has seen a more than fifteenfold surge in its value since the start of the year.

It climbed to as high as US$15,344 on the Luxembourg-based Bitstamp exchange around 1420 GMT, leaving it up more than 12% on the day, having traded just above US$13,000 12 hours earlier.

The latest surge brought bitcoin’s “market cap” – its price multiplied by the total number of bitcoins in circulation – to more than US$260 billion, according to Coinmarketcap, a trade website. That, in theory, makes its market value higher than that of Visa.

The value of all cryptocurrencies now stands at around US$415 billion, according to Coinmarketcap.

Bitcoin – which came into being in 2009 as a bit of encrypted software and has no central bank backing it and no legal exchange rate – has risen from a 2017 low of US$752 in the middle of January, and surged dramatically in the past month.

The increased interest has been driven by growing acceptance among traditional investors of an innovation once considered the preserve of computer nerds and financial experts.

But some, including the US Federal Reserve, have warned against dabbling in bitcoin as it could threaten financial stability, and fears of a bubble have increased as the price has soared.

“Bitcoin now seems like a charging train with no brakes,” said Shane Chanel, from Sydney-based ASR Wealth Advisers. “There is an unfathomable amount of new participants piling into the cryptocurrency market.”

But he warned: “Once the hype slows down, we will most certainly see some sort of correction.”

There are mounting concerns about its introduction into the mainstream financial system after US regulator the Commodity Futures Trading Commission last week cleared the way for bitcoin futures to trade on major exchanges.

Bitcoin is to be offered on the CBOE Futures Exchange from this weekend and on the world’s biggest futures venue, the Chicago Mercantile Exchange, from Dec 18. – Reuters, AFP

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