Bit­coin guns for US$10,000, de­fies bub­ble warn­ings

The Star Malaysia - StarBiz - - Front Page -

NEW YORK: Bit­coin blew past US$9,700 just a week af­ter top ping US $8,000 and ap­proached its clos­est ever to five fig­ures, gain­ing main­stream mar­ket at­ten­tion as it de­fies bub­ble warn­ings.

The big­gest price jump since Au­gust con­sol­i­dated dur­ing Ja­panese trad­ing hours and vaulted the largest cryp­tocur­rency’s value in cir­cu­la­tion above the mar­ket caps of all but about 30 of the S&P 500 in­dex mem­bers.

The in­crease also buoyed its 10-day volatil­ity to more than 15 times the level of the euro-dol­lar, the most traded currency pair.

“The more we hear about forks, it starts to fly higher again,” said Craig Er­lam, se­nior mar­ket an­a­lyst in Lon­don at Oanda, said by tele­phone re­fer­ring to per­sis­tent spec­u­la­tion that a split – or fork in in­dus­try par­lance – may be in the off­ing.

“It’s ex­tremely dif­fi­cult to de­ter­mine a fair value for bit­coin. And there’s no news of sub­stance on the reg­u­la­tory front.”

Bit­coin’s as­cent has stirred re­flec­tion by tra­di­tional mar­ket par­tic­i­pants and fanned spec­u­la­tion of a po­ten­tial bub­ble. From Wall Street ex­ec­u­tives to ven­ture cap­i­tal­ists, ob­servers have weighed in as bit­coin has risen about 45% over the past two weeks.

By com­par­i­son, it took the S&P 500 In­dex since Fe­bru­ary 2014 to achieve a sim­i­lar in­crease.

The surge has swept along in­di­vid­ual in­vestors. The num­ber of ac­counts at Coin­base, one of the largest plat­forms for trad­ing bit­coin and ri­val ethereum, has al­most tripled to 13 mil­lion in the past year, ac­cord­ing to Be­spoke In­vest­ment Group LLC.

“The week­end’s bit­coin price hike is just the con­tin­u­a­tion of a long-term bull run on the cryp­tocur­rency, fu­eled by the tsunami of spec­u­la­tive trad­ing on Ja­panese ex­changes and the en­trance of in­sti­tu­tional in­vestors across the world,” said Thomas Glucks­mann, Hong Kong-based head of mar­ket­ing at cryp­tocur­rency ex­change Gate­coin Ltd.

“It is more likely that the US$10,000 psy­cho­log­i­cal strato­sphere will push more in­sti­tu­tional in­vestors into the mix.”

Bit­coin reached an in­tra­day record high of US$9,747.49 on Mon­day, and was at US$9,656.31 as of 12:20pm in Lon­don, up 17% from last Fri­day and headed for its big­gest daily in­crease since Aug 14.

The pace of ap­pre­ci­a­tion has made it dif­fi­cult for bullish an­a­lysts and in­vestors to keep their pre­dic­tions up to date. — Bloomberg

HONG KONG: It’s get­ting tougher and tougher to keep track of all the dif­fer­ent ver­sions of bit­coin.

New iter­a­tions of the cryp­tocur­rency are mul­ti­ply­ing as dis­agree­ments over bit­coin’s de­sign per­sist and op­por­tu­ni­ties for mak­ing a quick buck prove hard to pass up.

The big­gest off­shoot, called bit­coin cash, ap­peared in Au­gust af­ter it split from the bit­coin blockchain in a so-called hard fork. That spinoff, cur­rently val­ued at al­most US$18bil, was fol­lowed by a less suc­cess­ful fork to cre­ate bit­coin gold in Oc­to­ber, while a ma­jor spinoff that was planned for this week, stem­ming from an up­grade of the bit­coin tech­nol­ogy called SegWit2x, was sus­pended. Now, sev­eral other splits are be­ing planned.

There’s bit­coin di­a­mond, bit­coin sil­ver and su­per bit­coin – the lat­est pro­posal to emerge. But that’s not all, there’s also bit­coin plat­inum and bit­coin ura­nium, whose de­scrip­tions in Red­dit posts looks sus­pi­ciously sim­i­lar–- and the ura­nium ver­sion car­ries the un­for­tu­nate ticker of BUM.

Each cryp­tocur­rency that breaks off from the main bit­coin chain aims to solve a prob­lem the de­vel­op­ers be­lieve bit­coin has. In the case of bit­coin gold, it’s the cen­tral­i­sa­tion in min­ing that re­sults from the amount of power and spe­cialised hard­ware re­quired to mine bit­coin.

Bit­coin gold tries to solve this by al­low­ing the cryp­tocur­rency to mined with any gam­ing graphic card. In bit­coin cash, the aim is to in­crease the block size to 8 megabytes from 1 in the bit­coin blockchain, to speed up trans­ac­tions and re­duce fees.

The ap­peal of cre­at­ing a bit­coin fork rather than a new cryp­tocur­rency is that the spinoffs gain ac­cess to bit­coin’s user base, as well as brand recog­ni­tion.

When coins split from the main chain, bit­coin in­vestors get the equiv­a­lent of their hold­ings in the new coin. This has caused bit­coin to rally ahead of hard-forks, as traders an­tic­i­pate what feels like free money. — Bloomberg

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