(qlmbusinessnews.com via news.sky.com– Tue, 28 Nov 2017) London, Uk – –
A single Bitcoin has hit $10,000 (£7,495) for the first time despite fears of a bubble.
The cryptocurrency hit $5,000 (£3,750) for the first time in October and in the brief period since then has doubled in value again.
It traded at $10,009 on the CEX exchange on Tuesday morning before dropping back down.
Over this calendar year, the digital cash has increased 1,000% in value and is continuing to attract investors.
Despite concerns that a bubble in the cryptocurrency’s value has been driven by increasing investment from those who fear they are missing out, investors continue to buy in to the digital means of exchange.
Bitcoin has surged through a number of symbolic milestones in recent weeks, showing an exponential curve on value-tracking charts.
However, as the World Coin Index image chart below shows, the volume of Bitcoin transactions has not grown at a similar pace to Bitcoin’s value – suggesting that many of those buying it are speculating on its value rather than using the currency to buy goods.
Despite volatility prompting severe drops at times, it has gained serious interest from financial institutions, with CME Group announcing its plans to launch a futures market in Bitcoin by the end of the year.
Onlookers have suggested that CME’s entry into Bitcoin could lure in more cautious investors.
CME Group’s contracts will be settled in cash, meaning that investors would not receive Bitcoin at a lower (or higher) rate, but the difference in price in dollars.
Sebastian Purcell, an assistant professor at SUNY Cortland in New York, wrote that he believed CME’s futures market would boost Bitcoin’s price – but ultimately “spells the end of Bitcoin mania”.
In a market outlook piece written for Seeking Alpha, Mr Purcell said: “These capital flows from institutions will temper volatility. This will make Bitcoin undesirable for traders, since volatility is critical for a good trading vehicle.
“These points mean that the gold-rush is over, but perhaps they also mean that Bitcoin could finally serve as a digital currency.”