Bitcoin, a digital currency also known as “cryptocurrency” rose higher than $1,000 yesterday evening – the first of such climb since 2013, Reuters reported.
This is the first time the virtual currency would oust all bank currencies in three years as it made a 125% climb at Bitstamp exchange based in Europe.
Bitcoin as a virtual currency is fast gaining global acceptance as a means of transactions largely because it is not centrally governed and with no central authority location.
Thousands of computers from around the globe carry out transactions on the digital currency and add about 12.5 bitcoins to the system every 10 minutes.
The worth of bitcoin is now valued at about $16 billion, putting it at par with a normal FTSE 100 company.
According to Paul Gordon, co-founder of Quantave and a board member of the UK Digital Currency Association, “the growing war on cash, and capital controls, is making bitcoin look like a viable, if high risk, alternative.”
With this recent surge in its value, bitcoin on Sunday climbed 2.5% to reach $1,022. Back in 2013, it had jumped to over $1,000 before it fell to below $400 following a hack at the Mt. Gox exchange based in Tokyo.
These events underscore the instability of bitcoin and its vulnerability to a wide range of events and situations. It could rise or fall without predictions or cause.
It fluctuated around 10% in 2016, but the daily movement in 2013 was around 40% – in response to its volatility.
Trading in bitcoin is mostly carried out in China, where the recent 7% fall of the Chinese yuan against the US dollar has prompted the Chinese to adopt a wide use of the digital currency.
People who desire to secretly move huge amounts of cash out of the country without being subjected to any financial or governmental restraints choose to use bitcoin, and this has been working largely for them.