The price of bitcoin soared to another all-time high on Wednesday and broke through the $10,000 barrier for the first time, nearly 9 years after the digital cryptocurrency was first created. The price has risen rapidly over the last few months.
The price of bitcoin reached $10,000 at 1:30 GMT on Wednesday (8:30 p.m. ET on Tuesday) and reached $10,195 about 1.5 hour later, according to the CoinDesk price index. The price had hovered just below $10,000 for most of the trading day on Tuesday.
The bitcoin market is now worth about $168 billion, according to CoinDesk. Reaching $10,000 is seen as a significant milestone for supporters of the cryptocurrency, but critics have questioned whether the rapid rise is sustainable in the long-term and have warned that the price could fall unexpectedly.
"Long-time bitcoiners finally feel vindicated that their currency that has been ridiculed for years, is at last being taken seriously," Sol Lederer, blockchain director at U.S. technology company LOOMIA, told Reuters on Monday. "Bitcoin’s future is still uncertain; it faces the same serious technical challenges it has for years and faces stiff competition from newer, more sophisticated blockchains. But even if it were to crash, it’s apparent that bitcoin is here to stay."
The price of bitcoin has continued to surge this year, rising from $731 at the end of November last year, representing an increase of more than 1,200 percent. It first hit $1,000 on January 1, $5,000 on September 2, $7,000 on November 2, $8,000 on November 19, and $9,000 on Sunday.
Bitcoin had already reached $10,000 on some exchanges in Asia on Monday, but it took until Wednesday morning for the price to break through the threshold on major trading platforms. In Zimbabwe, bitcoins are traded at a much higher rate, at nearly $17,900 as of Monday.
The increasing price has been driven by a number of factors, including increased interest in India, Venezuela, China, Russia, and Zimbabwe, as well as growing interest at financial institutions. Mainstream investors, however, remain reluctant to participate.
Most people at a Reuters investment summit said they believe the bitcoin market is a bubble that is destined to burst. "I don’t think about bitcoin; it’s just not even on my mind," Laurence Fink, CEO and founder of the world’s biggest asset manager, BlackRock Inc., told Reuters earlier this month.
Nonetheless, financial market company CME Group has said it will soon launch bitcoin futures, a move that could further increase interest in the cryptocurrency. British hedge fund firm Man Group plans to add bitcoin to its investment universe if CME launches bitcoin futures by the end of the year.
Bitcoins are intended to serve as an alternative for normal currencies and is not controlled by any country or central bank, making it an easy way for people to do business beyond the reach of government regulation. But the digital currency has suffered huge security breaches in the past and its exchange rate can rise or fall rapidly.
Published on November 28, 2017 - 9:39pm EST