Bitcoin has passed $17,000 on almost all major exchanges on December 7th, 2017. As the digital currency skyrockets, many of us ponder upon what is happening and how it is possible for something that was worth $100 back in 2011, to multiply its value by 170 times for 6 years.
From a currency associated with terrorism and illegal activities to developing into a “mass frenzy”, Bitcoin’s value has surpassed all expectations and many bears have turned into bulls now. This week the currency rose with almost 40%, exciting common people and speculators and worrying governments and central banks around the world.
Now, as the world is prepared to see bitcoin futures, coming as early as 10th of December (Sunday), people may now feel more confident about the value and “worth” of the currency. What this new bitcoin product means is that its legitimacy is confirmed. Investors will be able to transact with bitcoin the way they do with gold, stocks and bonds. In some way, this new launch equalizes bitcoin with the major financial assets on the market.
Once bitcoin hit $17,000 and close to that amount, many bitcoin exchanges crashed, including Coinbase and Bitfinex. In addition, experts now believe that the US market is not ready to deal with bitcoin options and futures yet. Even earlier supporters of it, like Goldman Sachs expressed opinion that the move is too fast and that the market is not ready yet, as Washington Post reported.
Renae Merle from WP also wrote:
“Such warnings haven’t stopped the craze surrounding the currency, as the sharp rise in value creates ever more demand around the world. In South Korea, ordinary people are pouring their life savings into bitcoins and other digital currencies. In Venezuela, after observing the rise of bitcoin, the government announced it would launch its own virtual currency called “The Petro” to get around U.S. sanctions.”
However, as the price keeps rising, it is interesting to note one thing: Bitcoin may be speculative and volatile, but one thing is palpable at this point – where the governments and central banks have failed, bitcoin triumphs. In countries like Zimbabwe, the digital currency hit $13,000 when around the world bitcoin was only around $8,000. Common people may be the real “gasoline” behind the rising value of bitcoin. As trust was lost in financial institutions around 2008, Satoshi Nakamoto created the one product that now is “ruling” over banks and creates massive frenzy around the world.