Bitcoin tops US $ 10,000; marks 10-fold increase in 2017

Virtual currency bitcoin soared to an all-time high above US $ 10,000 yesterday on major exchanges and digital currency indexes, including the widely followed Luxembourg-based trading platform Bitstamp.

At 0600 GMT, it was quoted around US $ 10,115 on Bitstamp, coming sharply off a high of US $ 10,743.61, which was a rise of more than 5 percent on the day.

Created in 2009, bitcoin uses encryption and a blockchain database that enables the fast and anonymous transfer of funds outside of a traditional centralized payment system.

It has increased more than tenfold in value so far this year, posting the largest gain of all asset classes, amid increased institutional demand for crypto-currencies as financial and mainstream use has expanded.

But sceptics say it a classic speculative bubble with no relation to real financial market activity or the economy, most famously Jpmorgan boss Jamie Dimon who labelled it a fraud.

Bitcoin crossed US $ 10,000 on smaller exchanges such as the CEX.IO exchange and the cryptocurrency index coinmarketcap.com long before it hit the milestone on Bitstamp.

“The price rise is a continuation of a long-term trend, which has been driven by the speculative activity in Japan and also with institutional investors dipping their toes into the cryptocurrency market,” said Thomas Glucksmann, Head of Marketing at Hong Kong exchange Gatecoin.