Bitcoin, the best-known digital cryptocurrency, reached a new record high on Thursday: $16,000 for one Bitcoin. That’s nearly a 25 percent rise from its record high, $13,000, that made headlines when it happened just a couple days ago. In its earlier days, circa 2011, one Bitcoin could be purchased for less than one dollar. At the beginning of 2017, one Bitcoin could be purchased for less than $1,000.
To put this in perspective: There are many people who are sitting on hundreds of thousands, if not millions, of dollars right now. If someone purchased $100 worth of Bitcoin in 2011, that person would now have $1.6 million in their CoinWallet — provided they sell today.
So, what’s driving this unprecedented surge? And is this sustainable in the long-run?
Like many economic bubbles, the reason for the the insane surge in Bitcoin — the cryptocurrency now has an estimated circulation of $250 billion — may not necessarily be based on rational behavior. Last week, a market analyst told The Guardian that the fluctuations in Bitcoin’s value epitomized “the madness of crowds.”
Yet some experts believe Bitcoin’s sky-high exchange rate has a lot to do with the influx of investors and increased interest from …read more