Bitcoin Jumps $400 in One Day and Soars to a New Record High
Bitcoin skyrocketed past $7,400 on Friday, hitting yet another record high.
The virtual currency had shot past the $7,000 mark for the first timeThursday and finished on $6,895.41 toward the end of the session.
According to CoinDesk, the cryptocurrency reached a renewed all-time high of $7,454.04 at 6:40 a.m. ET Friday, after opening at $7,030. The jump in price saw bitcoin rise 6 percent.
Analysts believe more institutional investors could warm to the digital token after derivatives operator CME Group announced it would introduce bitcoin futures contracts this year.
“This is bitcoin crossing the divide from the wild west of finance to the mainstream,” Charles Hayter, CEO of cryptocurrency comparison website Crypto Compare, told CNBC in an email Thursday.
“Futures from an incumbent exchange bring bitcoin and cryptocurrencies into the regulatory fold. This allows more complex financial products to be created and will eventually open the doors to institutional money.”
CME’s futures will be cash-settled and based on the CME CF Bitcoin Reference Rate (BRR), launched in November last year with Crypto Facilities, a digital cryptocurrency trading platform.
The bullish activity that followed CME’s announcement also saw the total value of all cryptocurrencies surge past $200 billion for the first time. The market cap of bitcoin alone is more than $124 billion.
Bitcoin’s price has risen 640 percent since the start of the year.
Upcoming hard fork
The world’s largest cryptocurrency is being faced with another “fork” in the blockchain (distributed ledger) that underpins it later this month.
Investors and miners — volunteers who approve transactions and add them to the blockchain — are currently divided over the direction of the digital asset.
Mining bitcoin is a long procedure, and a number of people in the bitcoin community are debating ways of speeding up the process.
Bitcoin has already undergone two hard forks this year, both of which led to the creation of new cryptocurrencies.
The first, in August, led to the creation of a new digital token called bitcoin cash. And last month, another fork led to the creation of bitcoin gold.
Some believe that another fork could result in yet another split in the blockchain, leading to the creation of a new cryptocurrency.
According to data from Coinmarketcap, bitcoin cash was trading at $651.27 at 8:29 a.m. ET Friday, up almost 17 percent for the session, while bitcoin gold traded at $129.27, up 2 percent.
Bitcoin skepticism
A number of critics have expressed doubt about the cryptocurrency.
On Thursday, the chief executive of Credit Suisse said that bitcoin was “the very definition of a bubble.”
“I think most banks in the current state of regulation have little or no appetite to get involved in a currency which has such anti-money laundering challenges,” Tidjane Thiam said at a news conference, according to Reuters.
Meanwhile, Oliver White, economist at Fathom Financial Consulting, said in a note Friday that bitcoin, as an asset, was “intrinsically worthless.”
“Bitcoin fans will doubtless argue that it’s no different from fiat money in this respect. But that’s to do a disservice to notes and coin, in our view. Notes and coin have government backing,” he said.
The cryptocurrency has also drawn regulatory concerns. Authorities in China made a decision to close down local bitcoin exchanges in September, a move which saw a temporary dip in the price.
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