Bitcoin trades above $5,000 for first time ever

[Jonathan Fairfield]

Bitcoin trades above $5,000 for first time ever

 

 

By Jemima Kelly

LONDON (Reuters) - Bitcoin smashed through the $5,000 barrier for the first time on Thursday, jumping as much as 8 percent on the day as investors shrugged off the latest warnings on the risks of buying into the booming cryptocurrency market.

 

Bitcoin, the biggest and best-known cryptocurrency, has chalked up a more than fivefold increase in price this year.

 

Typically for bitcoin, which at less than nine years old is still highly volatile and illiquid compared with traditional currencies and assets, the precise reason for its recent tear was unclear.

 

Upcoming splits in its software, reports that Goldman Sachs is considering offering bitcoin trading, rumours that China could ease restrictions, and even a political crisis in Spain's Catalonia region were all cited by market-watchers as reasons for the rally.

 

But the main factor could simply be demand from investors wanting 'in' on a market that has provided gains exceeding those of any other currency in every year bar one since 2010.

 

"People are just wanting to be part of it," said Ryan Nettles, head of FX trading and market strategy at Swiss bank Swissquote, which launched bitcoin trading two months ago. Nettles said interest had been much higher than anticipated and has come from banks, hedge funds and brokers.

 

"The interest really stems from the media hype," he added.

 

On Wednesday Russian President Vladimir Putin warned of the "serious risks" surrounding the nascent market, while Russia's central bank said it would ban cryptocurrency trading websites.

 

But that was not enough to put investors off, with bitcoin rallying around 10 percent since then.

 

Data released last week from SEMrush, a search engine data analytics firm, found the price had a 91 percent correlation with Google searches on bitcoin, suggesting that all news -- whether negative or positive -- drives up demand, even if bad news can have a temporary negative effect.

 

Bitcoin almost reached $5,000 at the start of September, but fell back sharply after the head of JP Morgan blasted the cryptocurrency as a "fraud" and as China forced exchanges to close down, sparking fears of a broader crackdown.

 

But after dipping below $3,000 in mid-September, bitcoin has leapt in value by more than 75 percent in four weeks.

 

"Bitcoin was designed to operate outside of the influence of governments and central banks, and is doing exactly that," said Iqbal Gandham, Managing Director at retail trading app eToro, which has seen huge increases in cryptocurrency trading volumes.

 

CRYPTO-RIVALS ALSO RALLY

 

By 1245 GMT, bitcoin was trading up 8 percent on the day around $5,200 on Luxembourg-based exchange Bitstamp.

 

Though there have been many warnings about a bitcoin "bubble", including from European Central Bank Deputy Governor Vitor Constancio, some say it has much further to climb. But determining its value is difficult.

"For most currencies there are several accepted methodologies for estimating relative value, normally based on macroeconomic fundamentals," said EFG Asset Management's Global Head of Research, Daniel Murray. "For bitcoin no such fundamentals exist."

 

Other cryptocurrencies -- whose prices tend to be highly correlated to bitcoin -- also rallied. Their total value -- or market capitalisation -- climbed above $160 billion for the first time since early September, according to industry website Coinmarketcap.com.

 

Two upcoming "forks" in the bitcoin software code, which will create rival clones of the cryptocurrency, were seen by some as a reason for the rise in price, which saw a boost after the "Bitcoin Cash" clone was created at the start of August.

 

"Investors are seeing the lessons of history in the up-and-coming forks and hoping for an extra dividend," said Charles Hayter, co-founder of data analysis website Cryptocompare, adding that rumours on online forums that China could reopen exchanges could also be affecting the price.

 

(Additional reporting by Jamie McGeever; Editing by Catherine Evans)

 

 

-- © Copyright Reuters 2017-10-12

[Juan B Tong]

Can't wait for my barber to advise me to buy in. I'll run home to put ear plugs in so my hearing isn't damaged by the sound of the crash.

[Peterw42]

Tulip Bulbs now worth as much as a house.

[mrdome]

"Claims for bitcoin's value are self-referential and contain a contradiction: it cannot be a speculative investment prone to quintupling and simultaneously a useful currency for making or receiving payments. If it cannot be both it must be neither. Bitcoin's price is supported only by the recruitment of enthusiasts to use or hoard it."

 

Quoted from the Financial Times on 14th September '17.

[phycokiller]

the crash has been coming for years now, every time the  price goes up. theres a certain humor in it I guess but its funnier if you actually have some, in my experience

Edited October 12, 2017 by phycokiller

[Dumbastheycome]

1 hour ago, mrdome said:

"Claims for bitcoin's value are self-referential and contain a contradiction: it cannot be a speculative investment prone to quintupling and simultaneously a useful currency for making or receiving payments. If it cannot be both it must be neither. Bitcoin's price is supported only by the recruitment of enthusiasts to use or hoard it."

 

Quoted from the Financial Times on 14th September '17.

That  statement is a  contradiction  in  and of  itself.  The   use  of  "If"  is  the  marker  of  some  panic  by the  conventional  currency  manipulators  etc. Why  can it  not  be  both? As  a tradeable  currency  it  is  capable  of  quintupling  in  tradeable   value  and  can be  also traded where  is  there  any  disadvantage  except  to   the  plasticized   paper  equivelant  that   comes  well under  the  control  of   too  many  who  have  no real  relationship  to  the  trade. How  much  emphasis  is there  on the  trade  in   non existent  gold?Digital  metal versus  digitable  digits?  lol

Looks  like  it  will  be   Bitcoin  or  no  coins  in  not too  long.

Chipped inplants  for  credit/debit transactions.

Every  newborn  mandatorily  gifted   100 credit  points for  initial existence  and  mortgaged   ever  after?  !   lol

 

[speedtripler]

Bitcoin and blockchain based assets are my best investment over the years, people don't realise  this technology will become as powerful as the Internet itself.... 

 

In 2020 current critics will wish they were more open minded to the possibilities 

 

Google Ronnie Moas or Tim draper or novogratz  or Peter thiel etc to get some perspective from people who know disruptive technology when they see it and have proved it by being right in the past. 

[theguyfromanotherforum]

Meh....when Jamie Dimon says bitcoin is fraud then you gotta believe him as being a fraud himself.

 

Personally I'd stick a "fork" in it and say it's done.

[hawker9000]

On ‎10‎/‎12‎/‎2017 at 8:12 AM, Dumbastheycome said:

That  statement is a  contradiction  in  and of  itself.  The   use  of  "If"  is  the  marker  of  some  panic  by the  conventional  currency  manipulators  etc. Why  can it  not  be  both? As  a tradeable  currency  it  is  capable  of  quintupling  in  tradeable   value  and  can be  also traded where  is  there  any  disadvantage  except  to   the  plasticized   paper  equivelant  that   comes  well under  the  control  of   too  many  who  have  no real  relationship  to  the  trade. How  much  emphasis  is there  on the  trade  in   non existent  gold?Digital  metal versus  digitable  digits?  lol

Looks  like  it  will  be   Bitcoin  or  no  coins  in  not too  long.

Chipped inplants  for  credit/debit transactions.

Every  newborn  mandatorily  gifted   100 credit  points for  initial existence  and  mortgaged   ever  after?  !   lol

 

'Don't know whether to disagree or not.  Do merchants who accept bitcoin price their goods & services in the local currency first, and then let their PC readjust the bitcoin price at the time of sale?  The bitcoin value seems far more volatile than most currencies, and I don't see how you can quote a static price for your product in bitcoin. 

 

[bartender100]

 

wow

$100 in bitcoin in 2010 now worth almost $73 million

 

https://www.rt.com/business/389190-bitcoin-historic-price-high/

[speedtripler]

6 hours ago, hawker9000 said:

'Don't know whether to disagree or not.  Do merchants who accept bitcoin price their goods & services in the local currency first, and then let their PC readjust the bitcoin price at the time of sale?  The bitcoin value seems far more volatile than most currencies, and I don't see how you can quote a static price for your product in bitcoin. 

 

There are now many services that let you spend bitcoin on the fly

 

The oldest was bitgo and bitpay who used to  handle the conversion for merchants but now they have CryptoCurrency  debit cards that let you pay for anything you like and it's as easy as using a normal debit or credit card 

 

The adoption is catching up fast tho, the first credit cards were introduced in the 1950's so buying things with CryptoCurrency is catching on a lot faster and it will only improve with more awareness and adoption.