Bitcoin hits new record high as warnings grow louder
Send a link to a friend
[December 16, 2017]
By Jemima Kelly
LONDON (Reuters) - Bitcoin blasted to
another all-time high of almost $18,000 on the Bitstamp exchange on
Friday, up 9 percent on the day, as warnings grew over the risks of
investing in the highly volatile and speculative instrument.
The cryptocurrency's staggering recent price rises -- more than 1,700
percent since the start of the year -- have driven worries that the
market is a bubble that could burst in spectacular fashion.
Bitcoin has climbed almost 80 percent so far in December alone, putting
it on track for its best month in percentage terms since December 2013.
On Friday it reached as high as $17,900 <BTC=BTSP> on the
Luxembourg-based Bitstamp exchange.
While bitcoin has added another fifth to its value since Monday, trading
has been slightly calmer than the wild price swings the market has seen
in recent weeks, with volatility lower since the launch of bitcoin
futures from Cboe Global Markets on Sunday.
Market-watchers said bitcoin's price was being lifted by the launch of
rival CME Group's bitcoin futures contracts on Sunday.
"The hope (is) that futures signal the unlocking of institutional money
into the digital arena and (that there will be) a rapid demand increase
and ratification of the technology and its principles," said Charles
Hayter, founder of industry website Cryptocompare.
But outside of the crypto market, worries continue to grow about the
amount of money piling into the space.
A study by Anglia Ruskin University, Trinity College Dublin and Dublin
City University released on Friday said bitcoin could pose a threat to
the financial stability of traditional currencies and markets.
[to top of second column]
Bitcoin (virtual currency) coins placed on Dollar banknotes, next to
computer keyboard, are seen in this illustration picture, November
6, 2017. REUTERS/Dado Ruvic/Illustration/File Photo
"Our evidence finds that the price of Bitcoin has been artificially inflated by
speculative investment, putting it in a bubble," said Larisa Yarovaya, one of
the report's authors and a lecturer at Anglia Ruskin University.
"Although bitcoin is not regulated by governments, it could still have a
knock-on effect on traditional markets due to the interconnectedness of
cryptocurrency markets with other financial assets."
Others, however, say bitcoin's total market size -- around $300 billion -- mean
the impact of any future price collapse would not be large enough to have a
knock-on effect on financial stability.
The BBC reported late on Thursday that the head of Britain's Financial Conduct
Authority, Andrew Bailey, had warned that bitcoin buyers should be prepared for
the possibility that they could "lose all their money".
Outages on some of the world's biggest exchanges this week, which left millions
of investors unable to access their funds during periods when trading volumes
are high, have also fueled concerns about the fragility of the market's
(Reporting by Jemima Kelly; Editing by Tommy Wilkes and Catherine Evans)
[© 2017 Thomson Reuters. All rights
Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.