Bitcoin hits $10,000 mark for first time

Bitcoin hits $10,000 mark for first time

Bitcoin pushed past the US$10,000 mark for the first time today, further stoking fears of a price bubble around the cryptocurrency.

The price of Bitcoin was hovering around $10,035 on cryptocurrency exchange CEX in morning trading, having reached $5,000 just a month earlier.

It has raised concerns that investors are over-estimating Bitcoin's value.

Neil Wilson, a senior market analyst at ETX Capital, said institutional investors "won't go near it".

[media=digiteka]v5qqvl[/media]

"Prices are in bubble for sure - people are buying for speculative (reasons) only and that is when you have to worry it's a proper unsustainable bubble.

"Trouble is guessing whether we are in the boom phase or have moved into the euphoria phase," he added.

Mr Wilson also noted that the Bitcoin price has not yet reached $10,000 on other exchanges, which he said indicated that this was an "incredibly immature market that is completely decentralised and unregulated, which makes it totally unsuitable for institutional investors".

Bitcoin has faced notable criticism in recent months, with JP Morgan boss Jamie Dimon taking aim at the cryptocurrency, calling it "a fraud" and saying he would fire employees found to be trading the digital currency for being "stupid".

"From an investment point of view we are still in the very early stages and the investment community just doesn't know enough, doesn't have the depth of data to fairly value Bitcoin," Mr Wilson added.

"Volatility has been so extreme that the big institutional investors don't want to take the risk. The massive spread between exchanges is also a problem."

But the head of the International Monetary Fund (IMF), Christine Lagarde, has conceded that cryptocurrencies like Bitcoin could be a useful tool in the future financial system.

She said virtual currencies could be "easier and safer" to hold than paper bills in remote regions, or countries with unstable national currencies or "weak institutions".

Ms Lagarde also urged central bankers to be "open to fresh ideas and new demands, as economies evolve".

A number of countries have taken a more cautious approach, however, with China recently banning the use of Initial Coin Offerings (ICOs) - a digital fundraising tool which sees investors exchange cryptocurrency for "tokens" representing a holding or voucher for a firm.

South Korea has since followed suit.

Mr Wilson said: "While speculative buyers think it will keep on rising, Bitcoin has yet to show itself as capable of behaving like a proper asset for investment purposes."

More in this Section

China warns of a new cold war in latest US rebukeChina warns of a new cold war in latest US rebuke

Austria leads revolt against €500bn Franco-German EU rescue planAustria leads revolt against €500bn Franco-German EU rescue plan

Irish tourism expected to see 80% drop in business this year due to coronavirusIrish tourism expected to see 80% drop in business this year due to coronavirus

Cruises Are Coming Back. Here’s What They’ll Look LikeCruises Are Coming Back. Here’s What They’ll Look Like


Lifestyle

Last week, I wrote about 'small is beautiful' as a key to an improved environment for all living things after this Covid crisis is finally over. As I wrote, I saw, in the mind's eye, the village where I live in west Cork and from which my wife and I are temporarily exiled.Damien Enright: Community spirit can ensure we pull through - together

Fifty years ago, a fox was spotted in Dublin’s St. Stephen’s Green. The unfortunate animal was chased by local ‘gurriers’. It took refuge in a tree but was promptly stoned to death.Richard Collins: Wildlife taking back the streets of our cities

The north pier on Cape Clear has been eerily quiet these last few months as no visitors disembark. The ferry is not unloading boatloads of tourists from Baltimore, 45 minutes away, or from Schull, as it would normally.The Islands of Ireland: Cape Clear tells its side of the story

If the Donegal postman and amateur weather forecaster has it right, we could be in for water shortages in the coming months. Michael Gallagher, who predicted the scorching summer of 2018 and the 2010 freeze-up, says we’ll have a ‘lovely’ summer.Donal Hickey: Demand for water to soar

More From The Irish Examiner