Bitcoin Price Soars Above $1,000 for the First Time

Nov 28 2013, 5:36am CST | by , in News | Technology News

Bitcoin Price Soared Above $1,000
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Bitcoin price soared above $1,000 for the very first time on Wednesday. The digital currency is in a boom now. Yesterday, the price of one Bitcoin hit an all-time high of $1,073 on Mt. Gox.

Bitcoin has been called a virtual and digital currency. And Bitcoins are used to buy online goods and services. It is a decentralized form of money that is used on the Internet. But its worth is increasing with every passing day. Yesterday, the Bitcoin price passed the $1,000 mark. It happened for the first time that a Bitcoin got a value above $1,000.

Mt. Gox is the main operator that buys and sells Bitcoins. This Tokyo-based exchange is the most famous Bitcoin digital marketplace. And yesterday the price of a single Bitcoin hit $1,073 on Mt. Gox. Within 30 days, the Bitcoin price increased by over 400%. It’s a huge surge in the value of the digital currency.

But the occurrence of this price hike in such a brief time period is still a mystery. "Virtual currencies, most notably Bitcoin, have captured the imagination of some, struck fear among others and confused the heck out of the rest of us," Senator Thomas Carper told the Senate Homeland Security Committee earlier this month.

No person or organization is running Bitcoin. This virtual currency is also not backed by a government or central bank. Nor is it bolstered by any physical assets. Bitcoin value is linked with the people's confidence in digital currency. It was being traded at around $215 towards the start of this month. And so such a huge surge in its price can be the result of its limited supply and increased demand.

"A narrow asset class and lots of liquidity is the perfect environment for a rapid burst up in value, and then corrections," said Sebastien Galy, a currency strategist at Societe Generale in New York.

Bitcoin acceptance is increasing with each passing day. It is gaining popularity among the investment community and general public. Yet the main online retailers, such as Amazon, Best Buy and others, have not started accepting Bitcoin payments.    

"It isn't just the Bitcoin community saying that Bitcoin is used for good things and that there's a lot of great potential in it. We have members of Congress and government agencies who all agree," said Jinyoung Lee Englund, spokeswoman for the Bitcoin Foundation in Washington.

Although Bitcoin trades on a 24/7 basis yet its supply is limited. Currently, 12 million Bitcoins are being traded. In accordance with the current Bitcoin price, its total market value is worth around $12.9 billion.

Source: Reuters

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