Bitcoin beats other currencies
Digital currency bitcoin kicked off 2017 by jumping above US$1000 (NZ$1450) for the first time in three years, having outperformed all central-bank-issued currencies with a 125 per cent climb in 2016.
Bitcoin, a web-based cryptocurrency with no central authority, relying instead on thousands of computers across the world that validate transactions and add new bitcoins to the system, jumped 2.5 per cent to US$1022 on the Europe-based Bitstamp exchange, its highest since December 2013. Though the digital currency has historically been highly volatile - a tenfold increase in its value in two months in late 2013 took it to above US$1100, before a hack on the Tokyo-based Mt Gox exchange saw it plunge to under US$400 in the following weeks - it has in the past two years been more stable.
Bitcoin may have been boosted in the past year by increased demand in China on the back of a 7 per cent annual fall in the value of the yuan in 2016, the Chinese currency’s weakest showing in over 20 years.
Data shows most bitcoin trading is done in China.
Bitcoin is used to move money across the globe quickly and anonymously and does not fall under the purview of any authority, making it attractive to those wanting to get around capital controls, such as China’s. It is also may appeal to those worried about a lack of supply of cash, such as in India, where Prime Minister Narendra Modi removed highdenomination bank notes from circulation.
Though bitcoin is still some way off the all-time high of US$1163 that it reached on the Bitstamp exchange in late 2013, there are now more bitcoins in circulation - 12.5 are added to the system every 10 minutes.
Its total worth is at a record-high above US$16 billion, valuing it around the same as an average FTSE 100 company. - Reuters