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Bitcoin heads toward $17,000 – surged to $16,777.08

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Another day, another more than thousand dollars increase for Bitcoin. The cryptocurrency has dominated financial conversations over the past few months but its latest jump is perhaps its most striking yet.

Bitcoin flirted with $17,000 on Thursday, triggering a warning the cryptocurrency was “like a charging train with no brakes” and prompting fresh concern about its looming launch on mainstream markets. Still under $14,000 in Asian trading hours, it smashed through $15,000 in European trading and then later surged to $16,777.08 around 1630 GMT, according to Bloomberg data.

“People are looking at a video game as a regular market. And it’s clearly not, otherwise it wouldn’t be where it is already,” said Walter Zimmerman, technical analyst at ICAP TA. “It’s beyond abnormal, it’s unprecedented. Every other commodity has natural sellers,” he added.

The rally came just a day after the virtual currency, which has been used to buy everything from an ice cream to a pint of beer, hit the $12,000 mark for the first time, while it has soared nearly 70 percent in value in just one week. Bitcoin — which came into being in 2009 as a bit of encrypted software and has no central bank backing it and no legal exchange rate — has risen from a 2017 low of $752 in mid-January and surged dramatically in the past month. The increased interest has been driven by growing acceptance among traditional investors of an innovation once considered the preserve of computer nerds and financial experts. But some, including the US Federal Reserve, have warned against dabbling in bitcoin as it could threaten financial stability, and fears of a bubble have increased as the price has soared.

“Bitcoin now seems like a charging train with no brakes,” said Shane Chanel, from Sydney-based ASR Wealth Advisers. “There is an unfathomable amount of new participants piling into the cryptocurrency market.” But he warned: “Once the hype slows down, we will most certainly see some sort of correction.” – Financial industry concerns – There are mounting concerns about its introduction into the mainstream financial system after US regulator the Commodity Futures Trading Commission last week cleared the way for bitcoin futures to trade on major exchanges, a decision which analysts say has helped spur the recent rally. Bitcoin is to be offered on the CBOE Futures Exchange from this weekend and on the world’s biggest futures venue, the Chicago Mercantile Exchange (CME), from December 18.

The Futures Industry Association, which groups some of the world’s biggest derivatives brokerages, criticised the plans in a letter to the regulator, saying that contracts are being rushed through without the risks being properly weighed up. “A more thorough and considered process would have allowed for a robust public discussion among clearing member firms, exchanges and clearing houses,” said the association. Transactions happen when heavily encrypted codes are passed across a computer network.

The NiceHash marketplace was meanwhile on Thursday investigating a security breach resulting in the theft of bitcoin. “Clearly, this is a matter of deep concern and we are working hard to rectify the matter in the coming days,” NiceHash said in a statement. “In addition to undertaking our own investigation, the incident has been reported to the relevant authorities and law enforcement and we are co-operating with them as a matter of urgency.

ASX opens up to blockchain

Cryptocurrencies such as bitcoin use a technology known as blockchain, which records transactions that are updated in real time on an online ledger. Transactions happen when heavily encrypted codes are passed across a computer network.

The announcement on Thursday by the ASX that it will now use blockchain technology for its clearing and settlement system is not insignificant in the current ‘bitcoin bubble’ debate, given that it is the first major exchange to commit to the technology that essentially underpins the now world-famous cryptocurrency.

“ASX has been carefully examining distributed ledger technology for almost two and a half years, including the last two years with Digital Asset,” explained ASX chief executive Dominic Stevens, saying that use of the technology would put Australia “at the forefront of innovation in financial markets”.

An essential attraction of bitcoin and blockchain technology is its potential to reduce the need for a central financial authority and for financial intermediaries, reducing the costs of transactions in the process.

Yet whether it is bitcoin or blockchain, many twists and turns remain ahead on the road to either ruin or acceptance.

” Bitcoin and other virtual currencies use blockchain, which records transactions that are updated in real time on an online ledger and maintained by a network of computers. In 2014 major Tokyo-based bitcoin exchange MtGox collapsed after admitting that 850,000 coins — worth around $480 million at the time — had disappeared from its vaults. Bitcoin’s use on the underground Silk Road website, where users could use it to buy drugs and guns, also raised suspicions about the virtual money. AFP

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