Bitcoin Won't Stop Going Higher
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Bitcoin is continuing its mind-boggling run-up, fascinating market enthusiasts everywhere. Overnight the virtual currency ran as high as $1242 before backing down slightly. It last traded at $1189, up 453% from the start of the month when it was only $215.
While bitcoin has been strong the later-part of this year, action really started heating up after a Congressional hearing earlier this month. The Congress was looking for more information on the virtual currency after an FBI crackdown on Silk Road, a website where participants were using bitcoin to buy drugs, guns and other illicit goods. At that hearing the Department of Justice said bitcoin can be a "legal means of exchange."
Speculators are drawn to the virtual currency given its limited supply. Bitcoin, which is mined by programers solving complex mathematical puzzles, is limited to total production of 21 million. Currently there are an estimated 12 million bitcoins in circulation.
The Winklevoss twins of Facebook fame possibly stand to benefit the most from the recent surge in the price of bitcoin. Reportedly, they own 1% of all the bitcoin in circulation and are seeking to create a bitcoin ETF that will be traded publicly.
Given the surge in popularity, more and more businesses are beginning to accept bitcoin as payment for goods and services. There are said to be nearly 1,000 businesses accepting it as payment.
Some say bitcoin is stealing gold's thunder as a place to hide from expected inflation with central banks around the world one-upping each other with quantitative easing measures. As bitcoin has surged, gold has plunged with big money flowing out of the precious metal.
Still, bitcoin is prone to volatile trading and many think it is a bubble waiting to burst.
While bitcoin has been strong the later-part of this year, action really started heating up after a Congressional hearing earlier this month. The Congress was looking for more information on the virtual currency after an FBI crackdown on Silk Road, a website where participants were using bitcoin to buy drugs, guns and other illicit goods. At that hearing the Department of Justice said bitcoin can be a "legal means of exchange."
Speculators are drawn to the virtual currency given its limited supply. Bitcoin, which is mined by programers solving complex mathematical puzzles, is limited to total production of 21 million. Currently there are an estimated 12 million bitcoins in circulation.
The Winklevoss twins of Facebook fame possibly stand to benefit the most from the recent surge in the price of bitcoin. Reportedly, they own 1% of all the bitcoin in circulation and are seeking to create a bitcoin ETF that will be traded publicly.
Given the surge in popularity, more and more businesses are beginning to accept bitcoin as payment for goods and services. There are said to be nearly 1,000 businesses accepting it as payment.
Some say bitcoin is stealing gold's thunder as a place to hide from expected inflation with central banks around the world one-upping each other with quantitative easing measures. As bitcoin has surged, gold has plunged with big money flowing out of the precious metal.
Still, bitcoin is prone to volatile trading and many think it is a bubble waiting to burst.
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