Saturday 24 February 2018

Bitcoin kicks off New Year by climbing back over $1,000 for first time in three years

Digital currency bitcoin kicked off the new year by jumping above $1,000 for the first time in three years. Photo: Bloomberg
Digital currency bitcoin kicked off the new year by jumping above $1,000 for the first time in three years. Photo: Bloomberg

Jemima Kelly

Digital currency bitcoin kicked off the new year by jumping above $1,000 for the first time in three years, having outperformed all central-bank-issued currencies with a 125pc climb in 2016.

Bitcoin is a web-based "cryptocurrency" that has no central authority, relying instead on thousands of computers across the world that validate transactions and add new bitcoins to the system.

It jumped 2.5pc to $1,022 on the Europe-based Bitstamp exchange on January 1, its highest since December 2013.

The digital currency has historically been highly volatile - a tenfold increase in its value in two months in late 2013 took it to above $1,100, before a hack on the Tokyo-based Mt Gox exchange saw it plunge to under $400 in the following weeks. In the past two years, it has been more stable.

Its biggest daily moves in 2016 were around 10pc, very volatile compared with traditional currencies, but markedly lower than in 2013 when daily price swings were as much as 40pc.

Bitcoin may have been boosted in the past year by increased demand in China on the back of a fall in the value of the yuan, which had its weakest showing in over 20 years in 2016.

Most bitcoin trading is done in China.

Bitcoin is used to move money quickly and anonymously. It does not fall under the control of any authority, making it attractive to those wanting to avoid capital controls, such as China's.

"The growing war on cash, and capital controls, is making bitcoin look like a viable, if high risk, alternative," said Paul Gordon, a board member of the UK Digital Currency Association and co-founder of Quantave, a firm that makes it easier for investors to access digital currency exchanges. (Reuters)

Irish Independent

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