Bitcoin Rings in the New Year, Spikes to $1022
Bitcoin, the digital currency, kicked off this New Year by moving above $1,000 for the 1st time in 3 years late Sunday, having outperformed all central-bank-issued currencies with a 125% rise in Y 2016.
Bitcoin is a web-based “cryptocurrency” that has no central authority, instead it relies on thousands of computers across the world that validate transactions and add new Bitcoins to the system.
Sunday Bitcoin jumped 2.5% to $1,022 on the Europe-based Bitstamp exchange, its highest since December 2013.
The digital currency has been highly volatile, and in Y 2013 it spiked above $1,100, before it plunge to under $400 in the weeks following an exchange hack in Japan. In the past 2 years been more stable.
Its biggest daily moves in Y 2016 were around 10%, still volatile compared with fiat (paper) currencies, but lower than the trading of Y 2013, which saw price swings of as much as 40% daily
Bitcoin has been boosted in the past year by increased demand in China on the back of a 7% annual fall in the value of the RMB Yuan in Y 2016, the Chinese currency’s weakest showing in over 20 years.
Data shows most Bitcoin trading is done in China.
Bitcoin is used to move money across the globe quickly and anonymously and does not fall under the rules of any authority, making it attractive to those wanting to get around capital controls, such as China’s.
It is also may appeal to those worried about a lack of supply of cash, such as in India, where Prime Minister Narendra Modi removed high-denomination bank notes from circulation in November.
Bitcoin is still off the all-time high of $1,163 that it reached on the Bitstamp exchange in late Y 2013, there are now more Bitcoins in circulation, as 12.5 are added to the system every 10 mins. Its total worth is at a record-high above $16-B, putting its value at around the same as that of an average FTSE 100 company.