Bitcoin climbs beyond $11,000 mark
The digital currency notched up a double-digit rise on Wednesday to reach a record $11,377 (£8,479)
Bitcoin has broken the $11,000 mark and touched an all-time high as the cryptocurrency’s heady rise shows no sign of abating.
The price of Bitcoin notched up a double-digit rise on Wednesday to reach a record $11,377 (£8,479), adding to concerns that investors are over-estimating Bitcoin’s value and exacerbating a market bubble.
In afternoon trading, the digital currency was up 13% at $11,162 (£8,319), taking it well beyond Tuesday’s push when it hit $10,000 (£7,453).
Neil Wilson, ETX Capital’s senior market analyst, said it was “a massive speculative bubble” because there were no “fundamentals or technicals” to explain the rise.
He said: “The madness of crowds is well documented, but it is quite something to behold in the flesh.
“It’s hard to keep up with this – Bitcoin just flew past the $11k mark, leaping $200 in barely five minutes before taking another big leg higher.
“So far it’s following the playbook for a speculative bubble to the letter. First we had the displacement resulting from a disruptive force in the market – in this case the blockchain technology.
“Next is the boom when the smart money moves in, which is followed by the euphoria phase as everyone rushes to get in on the action for fear of missing out. After this we get profit-taking as the smart money moves out and then, finally, the panic.
“The big question is whether we have reached the euphoric stage or are still in the boom phase.”
Bitcoin has faced notable criticism in recent months, with JP Morgan boss Jamie Dimon taking aim at the cryptocurrency, calling it “a fraud” and saying he would fire employees found to be trading the digital currency for being “stupid”.
But the head of the International Monetary Fund (IMF), Christine Lagarde, has conceded that cryptocurrencies could be a useful tool in the future financial system.
A number of countries have taken a more cautious approach, with China recently banning the use of Initial Coin Offerings (ICOs) – a digital fundraising tool which sees investors exchange cryptocurrency for “tokens” representing a holding or voucher for a firm.