NEW YORK–What to make of the surging price of Bitcoin?
Credit unions have been left to watch in amazement along with other analysts as the cryptocurrency surged to more than $16,000 in value on Thursday, an increase of more than $3,000 over a 24-hour period.
Overall, investors in Bitcoin in 2017 have seen their investments climb more than 1,400% since the beginning of the year, even as every increase is accompanied by predictions of a pending crash.
Had the U.S. credit union community, which closed out 2016 with assets of $1.29 trillion, seen similar asset appreciation it would now represent $16.8 trillion.
The sharp appreciation comes as Bitcoin futures are to be launched on the Chicago Board Options Exchange on Sunday.
Despite its stratospheric growth, some are predicting Bitcoin will only go higher.
Billionaire hedge fund legend Mike Novogratz, for instance, said during an interview on MSBC that he expects “Bitcoin could be at $40,000 at the end of 2018.”
With a similarly aggressive stance, Naeem Aslam, writing on Forbes.com, said Bitcoin could hit $18,000 per unit by Dec. 10.
Bitcoin and various exchanges have been hit with a number of technical glitches. The e-currency plunged 20% recently, before appreciating again. Fees on transactions on the exchanges have grown, and some buyers have complained of purchase transactions taking several days.
In addition, Bitcoin is just one form of blockchain, and different crypto-currencies have been built and are being built on different blockchains, or shared ledgers.
Meanwhile, NiceHash, which describes itself as the largest marketplace for mining digital currencies, said it suspended its operations for at least 24 hours because of a security breach. It is not known how many bitcoins were stolen.
Nigel Green, founder and chief executive of deVere Group, a financial advisory firm, issued a statement that “Bitcoin’s impressive current run continues, leaping over one psychological hurdle after another, and outstripping most previous expectations. It has caught many experts and commentators off guard. The meteoric rise of Bitcoin underscores the demand and the need for digital currencies in today’s world. Bitcoin and others have identified this and are meeting those demands and needs and filling the void.”
But Green cautioned, “Whilst many Bitcoin investors are popping the champagne corks at the moment, some caution needs to be exercised too. Bitcoin remains a major gamble as it is very much an ‘unchartered waters’ asset – we’ve simply not experienced this before. Also, an asset that goes almost vertically up should typically raise alarm bells for investors. In addition, many would argue that there’s limited underlying economic value.”