Cryptocurrency bitcoin smashed through the $12,000 mark early this morning amid fears of a bubble among analysts.
Bitcoin - which came into being in 2009 as a bit of encrypted software and has no central bank backing it - has risen from a 2017 low of US$752 in mid-January, and has surged dramatically in the past month.
Reuters Cboe Global Markets Inc. will launch its bitcoin futures contract on December 10, just over a week ahead of rival CME Group Inc., as the exchange operator takes the next step toward launching an exchange-traded fund based on the digital currency. Though the usage of bitcoins and their acceptance continues to grow and draw in large crowds of traders, we can safely say that the recent pushes higher in the price have been purely due to speculation rather than anything else.
The controversial cryptocurrency, which has been used to buy everything from a pizza to manicures, touched a new high of US$12,590 in Asian trade before dipping back to US$12,567, according to Bloomberg News. Yesterday Stephen Roach, Yale University senior fellow and the former Asia chairman and chief economist at Morgan Stanley, explained in comments to CNBC why he was deeply skeptical of investing in the cryptocurrency. "This is a risky speculative bubble by any shadow or stretch of the imagination". "And bitcoin is the most vertical of any pattern I've ever seen in my career", he added. The cryptocurrency has risen 10.2% in the past 24 hours and its total market cap now stands at almost $218 billion.
"Bitcoin futures trading on the major stock exchanges would provide more assurance for retail investors that the derivative is trading in a regulatory frame work".