Bitcoin buying frenzy surges
Cryptocurrency tops $ 16,000, and its $ 270B market value is nearly a third of Apple
The Bitcoin gold rush accelerated Thursday as the world’s best- known digital currency barreled through $ 14,000, $ 15,000 and $ 16,000 in an extraordinary run- up that values the cryptocurrency at $ 271 billion, eclipsing Home Depot’s market worth.
Bitcoin — which many Wall Street pros claim is a speculative frenzy and financial bubble — has boosted the digital currency’s market value so much that it’s now worth more than 488 of the 500 U. S. companies in the Standard & Poor’s 500 stock index. So only 12 companies in the large- cap stock index have market values greater than Bitcoin, S& P Dow Jones Indices data through Dec. 6 show.
At its peak Thursday, Bitcoin jumped more than 25%, rallying $ 3,325 and hitting an intraday record of $ 16,568.92 per coin, just eight days after topping $ 10,000. For the year, it is up more than 1,540%.
From its low of $ 11,450 on Tuesday to its peak Thursday, Bitcoin rallied 45% in a roughly 48- hour span. There are now 16.73 million in circulation, according to coinmarketcap. com. Bitcoin’s market value is simply the number of coins in the market times its price, which is constantly shifting.
The meteoric rise has caught the attention of Wall Street, which marvels at its steep and quick surge but fears the mania will end badly.
Jim Cramer, host of CNBC’s investment show Mad Money, called Bitcoin’s most recent spike “parabolic” and compared it to a rocket just after launch.
“It has a Cape Canaveral feel,” Cramer said Thursday on the cable business channel, referring to the Florida rocket launch site. “Maybe Bitcoin is going to Mars. Or Jupiter.”
But there’s a growing chorus of Bitcoin watchers warning investors to steer clear of the cryptocurrency,.
“It’s difficult to see anything move as Bitcoin has and not fear a devastating bubble bursting,” warned Craig Erlam, senior market analyst at OANDA, a New York- based foreign exchange firm. “
Bitcoin backers view it as a currency and payment system of the future as well as a new kind of investment. Skeptics say it is impossible to value, wildly volatile and a speculative play that may never gain widespread acceptance.
The bullish thesis has gotten a boost in recent weeks after a U. S. security regulator gave the OK for options exchanges to launch bitcoin futures. On Sunday, the Chicago Board Options Exchange is set to become the first regulated U. S. exchange to offer Bitcoin futures trading.
Another plank in the bull’s case is that there will be just 21 million created. Bitcoin works off blockchain technology, akin to an anonymous digital ledger not regulated by any government or financial institution.