$10,000 in sight for bitcoin as it rockets to new record high

LONDON: Bitcoin’s vertiginous ascent showed no signs of stopping on Monday, with the cryptocurrency soaring to another record high just a few percent away from $10,000 after gaining more than a fifth in value over the past three days alone.

The digital currency has seen an eye-watering tenfold increase in its value since the start of the year, and has more than doubled in value since the beginning of October.

It surged 4.5 percent on the day on Monday to trade at $9,687 on the Luxembourg-based Bitstamp exchange.

Bitcoin’s price has been helped in recent months by the announcement that the world’s biggest derivatives exchange operator CME Group would start offering bitcoin futures. The company said last week the futures would launch by the end of the year though no precise date had been set.

“$10k is on the cards and bitcoin seems to be straining at the leash to reach it,” said Charles Hayter, founder of cryptocurrency data analysis website Cryptocompare.

“Promises of bitcoin futures opening the door to institutional money are supercharging the price.”

What is Bitcoin?

Bitcoin is a virtual currency created from computer code. Unlike a real-world unit such as the US dollar or euro, it has no central bank and is not backed by any government.

Instead, Bitcoin’s community of users control and regulate it. Advocates say this makes it an efficient alternative to traditional currencies because it is not subject to the whims of a state that may devalue its money to boost exports, for example.

Just like other currencies, Bitcoins can be exchanged for goods and services — or for other currencies — provided the other party is willing to accept them.

Where does it come from?

Bitcoin was launched in 2009 as a bit of encrypted software written by someone using the Japanese-sounding name Satoshi Nakamoto.

Last year secretive Australian entrepreneur Craig Wright said he was the creator of Bitcoin, but some have raised doubts over his claim.

Hundreds of other digital currencies followed but Bitcoin is by far the most popular, with an increasing number of merchants accepting digital currencies for payments.

Transactions happen when heavily encrypted codes are passed across a computer network. The network as a whole monitor and verifies the transaction in a process that is intended to ensure no single Bitcoin can be spent in more than one place simultaneously.