Bitcoin now over $1,000 amid global currency instability

3 Jan 2017

Image: Andrei Kuzmik/Shutterstock

The decentralised cryptocurrency bitcoin is now over the $1,000 mark for the first time in three years, as major global currencies undergo major dips in the beginning of 2017.

Just before Christmas celebrations were about to get underway, bitcoin was experiencing a surge in interest and value, reaching a record circulation value of $14bn, with a single bitcoin being valued at $874.

Nearly two weeks later, this resurgence in the stateless currency has reached fever pitch, with Reuters reporting that on 2 January, a single bitcoin was worth $1,022 – the first time in three years that it had surpassed $1,000.

What made this news even more interesting was the fact that over the course of 2016, the online currency had a 125pc increase on the previous year, surpassing many traditional global currencies.

Throughout last year, its biggest daily moves were found to reach a peak of 10pc, which, despite being more volatile than central bank-issued currencies, was a sign of increasing stability for bitcoin.

Almost three years ago, the devastating MtGox breach that resulted in thousands of bitcoin worth millions of dollars being stolen saw its value crash from over $1,000 to just $400, amid swing values as high as 40pc.

India and China currencies dipping

While no definitive reason has been given as to why bitcoin has returned to such high levels, Reuters has suggested that it could be down to the fluctuating of major global currencies, particularly in China and India.

Demand for the currency – which allows anyone to make transactions without ties to a single country – has seen notable growth in China, following a fall in the value of yuan by as much as 7pc in 2016.

Similar fears over the future of the state currency have been experienced in India, following the shock decision last November to scrap the 500 and 1,000 rupee bank notes overnight.

Paul Gordon, a board member of the UK Digital Currency Association, said of bitcoin’s resurgence: “The growing war on cash, and capital controls, is making bitcoin look like a viable, if high risk, alternative.”

At the time of writing, bitcoin has since dropped slightly, but remains above the $1,000 mark at $1,013.

Colm Gorey was a senior journalist with Silicon Republic