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