Bitcoin surges above $16,000 as concerns mount

NEW YORK (AFP) – Bitcoin flirted with $17,000 on Thursday, triggering a warning the cryptocurrency was like a ''train with no brakes'' and prompting fresh concern about its looming launch on mainstream markets.

Still under $14,000 in Asian trading hours, it smashed through $15,000 in European trading and got as high as $16,777 before pulling back, according to Bloomberg data. Near 2145 GMT, bitcoin stood at $16,070.

The rally came just a day after the virtual currency, which has been used to buy everything from an ice cream to a pint of beer, hit the $12,000 mark for the first time.

The eye-popping rise has seen the currency's value soar more than 50 percent in just one week, and from just $752 in mid-January.

Bitcoin – which came into being in 2009 as a bit of encrypted software – has no central bank backing it and no legal exchange rate.

It has surged dramatically in the past month, driven by growing acceptance among traditional investors of an innovation once considered the preserve of computer nerds and financial experts, and sometimes more shady users.

But some, including the US Federal Reserve, have warned against dabbling in bitcoin as it could threaten financial stability, and fears of a bubble have increased as the price has soared.

''Bitcoin now seems like a charging train with no brakes,'' said Shane Chanel, from Sydney-based ASR Wealth Advisers. ''There is an unfathomable amount of new participants piling into the cryptocurrency market.''

But he warned: ''Once the hype slows down, we will most certainly see some sort of correction.''

There also are mounting concerns about its introduction into the mainstream financial system after a US regulator last week cleared the way for bitcoin futures to trade on major exchanges, a decision which analysts say has helped spur the recent rally.