BITCOIN today surged above $20,000 (£14,798) for the first time ever following big rises in recent weeks.
The digital currency reached a record $20,646 (£15,299) in afternoon trading – a gain of nearly 6.4% in just one day.
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Investors have ploughed cash into the digital currency, which is highly volatile, during the coronavirus crisis this year sending it to new highs.
But Bitcoin’s value plummeted to £3,300 when the coronavirus crisis struck the UK in March and the US implemented a European travel ban.
The controversial currency has been spurred by online payments giant PayPal saying it would enable account holders to use cryptocurrency.
Facebook is also working on its own digital currency Libra, bringing cryptocurrency further into the mainstream.
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What is Bitcoin?
HAS Bitcoin got you baffled? Here’s what you really need to know
- Bitcoin is a virtual currency
- It’s traded between people without the help of a bank
- Every transaction is recorded in a public ledger, or “blockchain”
- Bitcoin is created by mining
- Mining involves solving difficult maths problems using computer processors
- Bitcoin can be traded anonymously, which makes it a popular way of funding illegal activities
- Bitcoin is one of many different cryptocurrencies, but by far the most popular
Meanwhile, a number of central banks have responded to the rise of cryptocurrencies and the dwindling global use of cash by announcing plans for bank-backed digital units.
Unregulated by any central bank, bitcoin emerged in late 2008.
Yoni Assia, chief executive and co-founder of investing platform eToro, said: “$20,000 is undoubtedly a momentous milestone for bitcoin.
“Whilst it is easy to focus on the short-term price gains, which are headline-grabbing and attention worthy, it is also important also to recognise how far bitcoin has come.
“We have seen a significant shift in the demographic of those interested and invested in crypto.
“No longer the domain of just computer programmers and fintech advocates, I have seen bitcoin capture the attention of the masses.”
Meanwhile, some experienced bitcoin traders offered words of warning to potential buyers.
Trading veteran Glen Goodman told Forbes: “History has a warning for people buying at the new all-time-high.
“While I’m optimistic about the long-term prospects for bitcoin, four years ago we had a very similar situation with bitcoin breaking new ground, but just two weeks later its price plummeted by more than a third.
“History doesn’t always repeat itself, of course, but the lesson is to be on your guard.”
The cryptocurrency has also been surrounded by controversy with Bitcoin scammers targeting the accounts of high profile Twitter users earlier this year.
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And in October the financial regulator banned Brits from trading a certain type of cryptocurrency investment which it said was harmful.
In June, The Sun warned about a Bitcoin scam which used a picture of Britain’s youngest millionaire to con investors.
Tube worker trying to pay for his wife’s hospital treatment lost £16,000 to bitcoin investment scammers
This post first appeared on thesun.co.uk
