Bitcoin close to crossing US$10k mark

A bitcoin logo at the offices of La Maison du Bitcoin bank in Paris. Although the price of the largest cryptocurrency by market value is surging, not everyone agrees that bitcoin is an asset.
A bitcoin logo at the offices of La Maison du Bitcoin bank in Paris. Although the price of the largest cryptocurrency by market value is surging, not everyone agrees that bitcoin is an asset.PHOTO: BLOOMBERG

Cryptocurrency soars in value amid buying frenzy as it gains more mainstream attention

Bitcoin is showing no signs of slowing down, blowing past US$9,000 (S$12,000) less than a week after topping US$8,000 and now quickly closing in on the five figures.

The price of the largest cryptocurrency by market value is soaring as it gains greater mainstream attention despite warnings of a bubble in what not everyone agrees is an asset. From Wall Street executives to venture capitalists, observers have been weighing in, with some more sceptical than others.

Bitcoin has climbed more than 40 per cent over the past two weeks and is up more than 850 per cent this year.

"Bitcoin has seen another frenzy of buying as the fear of missing out trade bites even harder," analysts at IG Group, a trading-platform operator, wrote in a note yesterday.

"There are others who see downside risks from the introduction of bitcoin futures," they wrote. 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.

Bitcoin climbed as high as a record US$9,720.95 yesterday, and was recently up about 16 per cent compared with trading late last Friday.

The rapid appreciation has made it difficult for bullish analysts and investors to keep their predictions up to date. Hedge fund manager Mike Novogratz, who is starting a US$500 million fund to invest in cryptocurrencies, said last week that bitcoin would end the year at US$10,000.

A day later, Fundstrat head of research Thomas Lee doubled his price target to US$11,500 by the middle of next year. In a move towards mainstream investing, CME Group has said it plans to start offering futures contracts for bitcoin, which could begin trading next month.

JPMorgan Chase & Co, the largest US bank, was weighing last week whether to help clients bet on bitcoin via the proposed futures contracts, according to a person with knowledge of the situation.

Bitcoin's surge in value is forcing Wall Street banks to balance clients' interest in speculating on the cryptocurrency with executives' scepticism about its future.

JPMorgan Chase & Co chief executive officer Jamie Dimon has been one of bitcoin's most prominent detractors, calling it a fraud and deriding buyers as "stupid", while his finance chief Marianne Lake has struck a more measured tone. The firm is "open minded" about the potential uses for digital currencies so long as they are properly regulated, she said last month.

The total market cap of digital currencies now sits north of US$300 billion, according to Coinmarketcap.com's website.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on November 28, 2017, with the headline 'Bitcoin close to crossing US$10k mark'. Print Edition | Subscribe