It’s bit­coin ma­nia as cryp­tocur­rency surges past the US$5,000 mark


Bit­coin bub­ble or just the be­gin­ning? Or both? Those are the ques­tions be­ing asked on Wall Street to Main Street af­ter the dig­i­tal cur­rency breached US$5,000 for the first time, push­ing this year’s gains to more than five­fold.

As re­cently as De­cem­ber, bit­coin was trad­ing at less than US$1,000. Since then, it has dodged every­thing from tight­en­ing reg­u­la­tions, feud­ing fac­tions split­ting its un­der­ly­ing blockchain and warn­ings from the likes of JPMor­gan Chase chief ex­ec­u­tive Jamie Di­mon of fraud and an even­tual price col­lapse.

The lat­est leg higher is be­ing driven in part by in­creas­ing in­sti­tu­tional in­ter­est, with ev­ery­one from Gold­man Sachs’s Lloyd Blank­fein to Di­mon say­ing they’re now open to ways to get in­volved. The change of heart comes amid grow­ing op­ti­mism about the blockchain tech­nol­ogy.

“This record is an ex­cit­ing mile­stone and sign of mar­ket con­fi­dence in the out­look for bit­coin and the un­der­ly­ing tech­nol­ogy,” said Iqbal Gand­ham, a man­ag­ing direc­tor at eToro. “We ex­pect many more mile­stones like this to come.”

In­ter­est is grow­ing by the day, as mea­sured by searches on the in­ter­net. SEMrush, a data an­a­lyt­ics firm, found the price had a 96-per-cent cor­re­la­tion with Google searches on bit­coin, sug­gest­ing that grow­ing in­ter­est in the cryp­tocur­rency is help­ing to drive de­mand.

Bit­coin fell be­low US$4,000 last month af­ter China’s cen­tral bank banned ini­tial coin of­fer­ings and or­dered all cryp­tocur­rency ex­changes to close. Re­ports that the Chi­nese gov­ern­ment will ease those reg­u­la­tions is also help­ing the price.

A ro­ta­tion out of dig­i­tal to­kens sold in ini­tial coin of­fer­ings and into bit­coin is pro­vid­ing an ad­di­tional boost. In­vestors are be­com­ing in­creas­ingly wary as projects with lit­tle sub­stance have mush­roomed, and as hacks and tech­ni­cal is­sues have caused some to lose thou­sands. There’s a Wu-Tang Coin with the sole pur­pose of buy­ing and re­leas­ing the Wu-Tang Clan al­bum bought by fraud­ster Martin Shkreli, while Paris Hil­ton and Floyd May­weather pub­li­cized their ICO in­vest­ments on so­cial me­dia. Bit­coin is seen as a crypto-safe haven next to many of these to­kens.

“Ev­ery­one seemed to agree that once it broke through US$5,000, the sky is the limit. I wouldn’t be sur­prised to see it dou­ble from here in a very short space of time,” said Ben Ku­mar, a money man­ager at Seven In­vest­ment in Lon­don, who in­vests in bit­coin in an in­di­vid­ual ca­pac­ity. “There’s a long time to run be­fore peo­ple get tired of chas­ing the next big thing.”

Bit­coin isn’t the only one to ben­e­fit as lately it seems that shares of any com­pany with even an in­di­rect link to the cryp­tocur­rency space is bound to rally. Over­ soared af­ter an­nounc­ing a reg­u­lated dig­i­tal to­kens ex­change, while Gold­money climbed af­ter say­ing

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