Published: Thu, October 12, 2017
Business | By Max Garcia

Bitcoin trades above $5000 for the first time ever

Bitcoin trades above $5000 for the first time ever

Bitcoin smashed through the US$5000 (NZ$7000) barrier for the first time, jumping as much as 8 percent on the day as investors shrugged off the latest warnings on the risks of buying into the booming cryptocurrency market.

Another major difference is that bitcoin's creation, value and integrity come from complicated, mathematical wizardry, known as "blockchain" technology, which regulates the creation of new units and essentially ensures the security of every transaction involving the digital currency. In the last week alone, for instance, one bitcoin has ranged from Thursday's high of more than $5,200 to a low of about $4,200. The digital currency plunged below $3,000 in mid-September after the Chinese authorities announced a crackdown.

Bitcoin, the biggest and best-known cryptocurrency, has chalked up a more than fivefold increase in price this year.

Reports have recently emerged stating that trading in the currency could resume but with increased regulation.

One of the key benefits of using this cryptocurrency is that it essentially allows users bypass government and banking regulations and nearly remain anonymous.

Interestingly, not all cryptocurrencies are following bitcoin's lead today, which usually happens when the incumbent cryptocurrency experiences price fluctuations. And last month, JPMorgan CEO Jamie Dimon called the currency a "fraud" that will "blow up". "So to us, this bounce back in price is no surprise", the analyst added.

"It is folly to think that bitcoin will ever be allowed to supplant central bank-issued money", he wrote in the Guardian this week.

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