UPDATE: Since the time of writing, the price of one Bitcoin has surpassed $750.
Bitcoin is soaring. The crypto-currency hit the $500 mark for the first time on Sunday – a fifty fold increase in 12 months, according to CoinDesk.
Just a couple weeks ago, you could buy one bitcoin (BTC) for about $250.
There are currently just over 12 million bitcoins in existence, with a total market cap of $5,581,140,286 according to the bitcoin Price Index.
Fans of the crypto-currency see the price rise as a testament to the bitcoin’s resiliency and its legitimacy as a store of value.
In fact, just this week for the first time ever, a mining company fulfilled a transaction using bitcoins.
Despite many setbacks – including an FBI raid of Silk Road, an online black market that used bitcoins – the currency’s “value never fell,” CoinDesk writes.
“Nearly every piece of bad news about individual cases heralded more expectations that bitcoin would pay the price. That it has continued to rise despite these setbacks could well be feeding back and pushing values even higher, as investors sense bitcoin is a more resilient asset than previously thought.”
The Winklevoss twins recently chimed in with their words of encouragement, calling the bitcoin ‘Gold 2.0.’ And they would know – the two have made millions on their bitcoin investment after buying at $9 per BTC.
But with such drastic upwards movement, critics are increasingly calling the bitcoin’s success a bubble.
Peter Schiff of Europe Pacific Capital recently told CNBC that a lot of people are buying BTCs because they think the price will go up.
“And the price probably will go up, and it will keep going up until it implodes,” he said.
“I don’t see bitcoins as an alternative to gold,” Schiff noted. “It’s no better than a fiat currency.”
Garrick Hileman, economics historian at the London School of Economics told CoinDesk that it’s too early to tell if this is a bubble. He says that growing media attention and scrutiny from regulators are contributing to the hype, but that if bitcoin wants to go mainstream, it’s going to need more regulation.
“The lack of legal clarity is arguably the single most important issue facing bitcoin right now,” Hileman told CoinDesk. “For example, banks are scared of bitcoin, and reluctance by banks to work with the growing bitcoin ecosystem is a significant barrier to wider adoption.”
15 Comments
Sammry
The cries for regulation can only be seen as positive news for Bitcoin (and other cryptocurrencies). This means that the banking and governance system of the old has finally (and publicly) acknowledged bitcoin as a threat and has decided to play alongside bitcoin, rather than against it.
interloper
Not better than fiat currency? what universe does Peter Schiff live in?
bugby
MARK MY WORDS:
Either the banksters get on board and adopt this new transition of curency.
OR
Bitcoin will leave the banksters and their horrid corruptions behind.
George Autry
Bitcoin is a digital asteroid that has just entered the financial atmosphere and will shortly send banks to join their Triassic relatives. I explain why at http://wp.me/p3mWpA-1w Arigato, Satoshi
Boggle Smith
Did nobody tell Schiff that we had the implosion already in 2011 and survived?
Bob
holy cow could break 600 at this rate
Bob
like today
JH
I am gpoing to start “BiCoin Bank”. Holders of BitCoins can deposit them and I will use a fiat currency approach to lend out to those who need them. I think I will start at a ratio of 2:1 , I will pay interest, the daily value of BitCoin plus 15% p.a.
Then I will slowly build to 1000:1 maybe even 1,000,000:1. At that point I will approach the US Treasury claiming to big to fail.
I will be seeking gazillions of value in tonnes of gold in a Troubled BC Plan.
I think this is a great plan.
Don’t tell anyone. Those that borrow have to buy more with $ and gold, and the BitCoin price will go up as well.
Then I will start a proprietary trading desk and hire Blythe Masters from JPM Chase to setup some derivatives and leverage that 100:1 on my million:1 and we can rule the world.
Nobody will never know.
.
Night life
Maybe he wants more for himself.
Matt
So if a Bitcoins is worth 500.00. Is that figure (500) paid in real money for the bitcoin and why does the guy recieving that money want real money? Hahahaha…..people are so dumb. To those at the bottom of the pyramid you might as well forget a class action suit. It is Caveat Emptor rules here.
Dan
I don’t think you understand how Bitcoin works. and yet have an overly cynical know-it-all attitude. You are right, people are so dumb. Especially you.
Matt
Pyramid scheme that is so painfully obvious. I mean really. Some dudes are allowed to “invent” money and then sell it for an established currency? Does that not say it all to you rocket scientist paying 500.00 for one of them little things?
LAMB
Matt – you nailed it again – WHY are people even believing that a BITCOIN has ANY real value. Is this a ‘BRE-X type of SCAM?
Todd
I got some shells and beads, just $5.00 each…;)
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