Published: Thu, October 12, 2017
Finance | By Loren Pratt

Bitcoin races past $5000 to a new all-time high

Bitcoin races past $5000 to a new all-time high

But other factors have gotten traders excited: An Oct. 2 Wall Street Journalarticle reported that Goldman Sachs was considering opening a unit focused on bitcoin traders. Bitcoin has soared by more than 750% in the past year and is worth four times as much as an ounce of gold. Nettles said interest had been much higher than anticipated and has come from banks, hedge funds and brokers.

Bitcoin mania just crossed the $5,000 mark.

This week, Russian Federation has announced the regulation of digital currencies, as President Vladimir Putin said the instrument has significant financial risks.

But that was not enough to put investors off, with bitcoin rallying around 10 per cent since then. But he also warned against imposing "too many barriers", which appears to have given bitcoin a boost. "So we expect some investors to be surprised by bitcoin bouncing back", said Iqbal Gandham, managing director at broker eToro UK, in a note on Thursday.

Bitcoin, a virtual currency created from computer code, was worth only a few USA cents was launched in 2009 by someone using the Japanese-sounding name Satoshi Nakamoto.

It has been a volatile journey, with the cryptocurrency sliding down to under $3,000 last month when Chinese authorities announced a ban on trading the currency.

"For most currencies there are several accepted methodologies for estimating relative value, normally based on macroeconomic fundamentals", said EFG Asset Management's Global Head of Research, Daniel Murray.

Other cryptocurrencies - whose prices tend to be highly correlated to bitcoin - also rallied.

According to data from SEMrush, a search engine data analytics company found the price had a 91% correlation with Google searches surrounding bitcoin, suggesting news surrounding the cryptocurrency increases the valuation of Bitcoin.

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