After crossing $9,000 yesterday, the price for bitcoin is quickly approaching $10,000. The cryptocurrency reached a high of $9,731.51 at 09:00 UTC before declining by $500. At 12:42 UTC, bitcoin was trading at $9674.96, an increase of 3.74% in the last 24 hours.
In terms of valuation, the digital currency is worth more than $162 billion, as of this writing. Apart from increased bitcoin trading volume across exchanges, miners also seem to have shifted their systems to mining bitcoin from Bitcoin Cash, which had commanded most mining operations in recent weeks. (See also: If You Had Purchased $100 Worth Of Bitcoin In 2011.)
Among the top 10 most-traded cryptocurrencies, a majority trended upward, helping push the market’s overall capitalization to $303.2 billion. It passed the $200 billion mark on November 13.
Bitcoin started 2017 at $997 and has risen by 862% so far. For those who prefer familiar references, bitcoin is now worth more than General Electric Company (GE) and IBM Corp. (IBM). And traders value the cryptocurrency higher than retail behemoth Wal-Mart Stores Inc. (WMT). (See also: Basics For Buying And Investing In Bitcoin.)
But investment in digital currencies is unlike investing in the stocks of the companies mentioned above. For example, bitcoin does not offer dividends nor is its price regulated. Thus, regulatory agencies will not intervene if its price crashes precipitously. It is also opaque and unaccountable to its shareholders' demands.
In spite of the risks, investors still flock to it. Billionaire Michael Novogratz, who has invested approximately 10% of his net worth in cryptocurrencies, has predicted a $10,000 price target for bitcoin before the end of 2017. Hedge funds solely focused on the cryptocurrency market have mushroomed in recent times. The CME and CBOE are both planning to start bitcoin futures trading.
Day traders are also getting into the act. According to the latest data from Alistair Milne, manager of Altana Digital Currency Fund, the largest cryptocurrency wallet in the world, Coinbase, added 300,000 users from Wednesday to Sunday last week. He told Reuters that “breaking $10,000 seems inevitable (for bitcoin) following the recent price action."
Charles Hayter, founder of Cryptocompare.com, a website that lists trading statistics for cryptocurrencies, said institutional money was “supercharging” bitcoin’s price. While it may have the effect of tamping down prices and volatility, investments from institutional investors and government regulation will help legitimize bitcoin.
“Whether the price will be justified in the foreseeable future depends on the adoption and application of the new currency, said Hussein Sayed, chief market strategist at FXTM.