Red-hot bitcoin soared through an all-time high above $11,000 on Wednesday, taking its gains to nearly 1,000 per cent so far this year, the most of any asset class.
Depending on where you look, the virtual currency hit the $10,000 milestone some time between Tuesday and early Wednesday in several digital currency exchanges.
On Wednesday, bitcoin hit an all-time high of $11,395 , on the Luxembourg-based BitStamp, one of the largest and most liquid digital currency exchanges. But by mid-afternoon in New York, bitcoin was back below $10,000, an expected pullback after a steep rally.
Despite widespread scepticism of many veteran bankers and fund managers, bitcoin is being propelled by a continued influx of retail buyers as well as promises of bitcoin futures opening the door to institutional investors, analysts said.
Created in 2009, bitcoin tracks the ideas set out in a white paper by an individual or group of individuals called Satoshi Nakamoto, whose true identity has yet to be revealed. It promises lower transaction fees than traditional online payment systems and is not regulated by any government or entity.
Enthusiasts and supporters of bitcoin are attracted by its revolutionary ideals of transparency and a lack of central or official control. But the risks of dealing in bitcoin were exposed in 2013 when Tokyo-based exchange MtGox collapsed after admitting it had lost the equivalent of hundreds of millions of dollars of investor funds.
Bitcoin is a far cry from those early beginnings.
The $10,000 level when it happened was a key turning point for this digital asset and a critical moment for the crypto-currency space in general.
“Investors will be looking to take profits and re-evaluate their positions. There will be some churn as overweight bitcoiners wash into other cryptos searching for yield,” said Charles Hayter, founder and chief executive officer of CryptoCompare, an interactive crypto-currency platform.
Bitcoin took 834 days to top $1,000 from the time that BitStamp started to track the price in August 2011. It took another 1,270 days to hit $2,000 on May 20, 2017. However, the price has surged in the later half of 2017, crossing successive $1,000 milestones with ever increasing speed on its march toward $10,000.
As bitcoin soars, the virtual currency market now has market capitalization -- its price multiplied by the number of coins that have been released into the system -- of more than $300 billion. Bitcoin accounts for more than 50 per cent of that market cap.
Bitcoin's volatility versus other asset markets shows a sharp divergence, with more frequent peaks and sharp declines over the last two years.