Bitcoin breaches $6,000 for the first time; Cryptocurrency mania takes off

BE2C2 Report  (updated)– Crytocurrency mania may be really taking off defying conventional wisdom, forcing institutional investors and regulatory authorities to seriously consider it as the new ‘growing’ kid on the global financial block.

Bitcoin soared to another milestone Friday, as the digital currency breached $6,000 for the first time to put its gain in 2017 to more than 600 percent. It’s added almost $500 in value in the past two days alone while reaching a record high. Bitcoin began the year near $800.

The end-of-week rally is another sign that the threat of oversight won’t damp enthusiasm for digital currencies. Bitcoin was quick to shrug off China’s move to tighten its grip on trading, extending an eight-fold increase over the past year to a record high on Oct. 13.

According to Bloomberg, as bitcoin continues climbing, Twitter users are speculating that the rise could be driven by everything from a cash shortage in Zimbabwe to an increase in margin trading. “If one thing is for sure, it’s that speculation has a part to play in the top digital token’s latest surge.”

The Commodity Futures Trading Commission released a primer this week on virtual currencies, reiterating its view that virtual tokens can fall under its authority. The U.S. Securities and Exchange Commission has already said tokens from some ICOs can be deemed securities under its oversight.

OCT 13– Rising investor interest and belief that China might ease trading restrictions sent the value of Bitcoin to a new all-time high Thursday — $5,320.

Bitcoin began the year near $800 and has been on a tear ever since increasing its value by 665 percent since then.

The cryptocurrency is unregulated by any central bank and is not tethered to regulations from any central bank.

Investors (overseas and institutional) are examining the potential of the digital currency amid reports of surging interest from Japanese investors, according to The Fortune. And the fear of a weakening currency has pushed Russian and Chinese investors into Bitcoin, report SeekingAlpha. Those who are invested in China and Russia, upon seeing the local exchange rate weaken, want to get their money out fast before they lose any more on the conversion back to dollars, it said.

“Those fears have been pushing capital flows into virtual currencies like Ether and Bitcoin, bypassing the controls that the governments have in place to prevent capital outflows.”

Other factors that may be spurring on bitcoin are a move by the large U.S. exchange Coinbase to let ordinary investors engage in day trading, and bullish notes from big banks like Goldman Sachs and even JP Morgan, a longtime bitcoin bull.

The Wall Street Journal reported last week that investment banker Goldman Sachs is considering the installation of a trading desk for bitcoin and other digital currencies. It added Thursday that several hedge funds are being established for bitcoin speculation as well, although JPMorgan Chase CEO Jamie Dimon has referred to the bitcoin sector as a fraud and an eventual price collapse–comparing it to the 17th century market for tulips, a classic example of a financial bubble that acquires investors until it bursts.

The change of heart comes amid growing optimism about the blockchain technology.

“This record is an exciting milestone and sign of market confidence in the outlook for bitcoin and the underlying technology,” said Iqbal Gandham, a managing director at eToro, a trading platform. “We expect many more milestones like this to come.”

Interest is growing by the day, as measured by searches on the Internet. SEMrush, a data analytics firm, found the price had a 96 percent correlation with Google searches on bitcoin, suggesting that growing interest in the cryptocurrency is helping to drive demand.

“Everyone seemed to agree that once it broke through $5,000, the sky is the limit. I wouldn’t be surprised to see it double from here in a very short space of time,” said Ben Kumar, a money manager at Seven Investment in London, who invests in bitcoin in an individual capacity. “There’s a long time to run before people get tired of chasing the next big thing.”

Also read: The rise and rise of Bitcoin creating space for cryptocurrency in Pakistan

Bitcoin bubble or just the beginning? Or both? Those are the questions being asked on Wall Street to Main Street.

Reports have now emerged that China’s ban on bitcoin trading could soon be reversed, CNBC reported, further adding to the speculation and the increase in bitcoin’s price.

Chinese regulators implemented a ban on bitcoin trading in September. China’s Xinhua News Agency reported this month that the ban was caused by the currency’s use by criminal enterprises, citing money laundering, drug trafficking, smuggling, illegal fund-raising and other criminal activities.

Xinhua’s report mentioned that new licensing and anti-money laundering could be put into practice by bitcoin exchanges.


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