Bit­coin hits new record above $6,000

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE - Gertrude Chavez-drey­fuss

BIT­COIN surged to a record high of more than $6,000 last Fri­day, push­ing its mar­ket cap­i­tal­iza­tion to $100bn at one point, as in­vestors con­tin­ued to bet on an as­set that has a lim­ited sup­ply and has paved the way for a whole slew of crypto-cur­ren­cies.

The orig­i­nal vir­tual cur­rency has gained over 500pc this year, more than any other trad­able as­set class. Bit­coin though is very vo­latile — post­ing gains and losses as high as 26pc and 16pc re­spec­tively on any given day. Last Fri­day, bit­coin hit a record peak $6,000.10 on the Bit­stamp plat­form, and was last at $5,964.24, up 4.7pc on the day.

Bit­coin is a dig­i­tal cur­rency that can ei­ther be held as an in­vest­ment, or used as a foun­da­tion for fu­ture ap­pli­ca­tions through the blockchain, its un­der­ly­ing tech­nol­ogy. The blockchain is a dig­i­tal ledger of trans­ac­tions.

It is more scarce though than most peo­ple re­al­ize. The num­ber of bit­coins in ex­is­tence is not ex­pected to ex­ceed 21 mil­lion.

An­a­lysts said it was a com­bi­na­tion of fac­tors that drove Fri­day’s surge in price.

Charles Hayter, co-founder of data anal­y­sis web­site Cryp­to­com­pare in Lon­don said hopes that China will soften its reg­u­la­tory stance on crypto-cur­ren­cies helped bit­coin’s cause. “As China ... fears fade, the price is un­locked and driven by de­mand and buy­ers en­ter­ing the mar­kets,” said Hayter.

Over the sum­mer, China has banned the prac­tice of rais­ing cap­i­tal through the sale of to­kens to the pub­lic in what is known as ini­tial coin of­fer­ings. It has also or­dered the shut­down of dig­i­tal cur­rency ex­changes.

But many in the mar­ket be­lieve the Chi­nese ban is tem­po­rary.

“China would not want to be left out of the dig­i­tal cur­rency mar­ket nor the devel­op­ment of blockchain ap­pli­ca­tions in gen­eral,” said Ja­son English, vice-pres­i­dent of Pro­to­col Mar­ket­ing, at Sweet­bridge, a global al­liance in Zug, Switzer­land that aims to use blockchain to cre­ate a liq­uid sup­ply chain. “As much as 60pc of the world’s bit­coin min­ing is hap­pen­ing in China, and there­fore, many of the large ... in­vest­ments in ICO projects have also been com­ing from crypto-cur­rency hold­ers in China, whether di­rectly or in­di­rectly,” English added. Sean Walsh, a part­ner at ven­ture cap­i­tal firm Red­wood City, Ven­tures in Red­wood City, Cal­i­for­nia, also be­lieves in­vestors have been go­ing back into bit­coin given the still un­cer­tain global reg­u­la­tory en­vi­ron­ment on crypto-cur­ren­cies. A big part of bit­coin’s re­cent surge was the ICO craze, which ex­ploded this year. Bit­coins and ether, an­other dig­i­tal cur­rency, are used to pur­chase to­kens for ICOS. Reuters

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