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Bitcoin Breaks $1,000 Level

Bitcoin Breaks $1,000 LevelBitcoin Breaks $1,000 Level

The price of bitcoin has breached the $1,000 mark, hitting a more than three-year high on Monday. The cryptocurrency was trading at $1,021 at the time of publication, according to CoinDesk data, at level not seen since November 2013, with its market capitalization exceeding $16 billion, CNBC reported.

Bitcoin has been on a steady march higher for the past few months, driven by a number of factors such as the devaluation of the yuan, geopolitical uncertainty and an increase in professional investors taking an interest in the asset class.

“We are seeing the aftermath of zero interest rates run amok. So bitcoin is a healthy reminder that we don’t have to hold on to dollars or renminbi, which is subject to capital controls and loss of purchasing power. Rather it’s a new asset class,” Bobby Lee, chief executive of BTC China, one of the world’s largest bitcoin exchanges, told CNBC by phone.

China is the source of the majority of trade in bitcoin and the devaluation of the yuan and fears over capital controls have contributed to the recent spike in the digital currency.

But several other factors have also had a notable impact. For example, bitcoin’s price has appreciated around 137% in the past 12 months but got a big boost after Donald Trump won the US election in November. Another big event this year was in June when a change in bitcoin’s underlying rules meant those who were “mining” the cryptocurrency–a process whereby users are awarded with bitcoin if they solve complex mathematical puzzles in order for a bitcoin transaction to go through–received less rewards. This was due to the process known as “halving,” which essentially reduces the supply of bitcoin.

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