Bitcoin bursts through $5000 for the first time


The cryptocurrency rose by more than 8% to $5,243 having started the year at $966. Some exchanges saw the price hit $5,000 for a few minutes in September, but it only lasted for about 10 minutes, making today the first sustained movement past the historic milestone.

Up over $1,000 since last month, Bitcoin has risen over 25% within the last 30 days. Ethereum is only up 2%, while Ripple is down 2%.

The price of the controversial crytpo-currency soared by more than $500 on Thursday to more than $5,330, bringing it to a new all-time high. Its market capitalization is 53 percent of the market capitalization of all cryptocurrencies.

Bitcoin nearly reached US$5000 at the start of September, but fell back sharply after the head of Goldman Sachs blasted the cryptocurrency as a "fraud" and as China forced exchanges to close down, sparking fears of a broader crackdown. High Bitcoin transactions show the high levels of interests the public has on Bitcoin.

This week, Russian Federation has announced the regulation of digital currencies, as President Vladimir Putin said the instrument has significant financial risks.

The cryptocurrency is highly controversial, with JP Morgan boss Jamie Dimon saying that it was only suitable for drug dealers, murderers and people living in North Korea.

The soaring value of bitcoin and other cryptocurrencies comes despite growing warnings over a price bubble.

"Yet bitcoin was created to operate outside of the influence of governments and central banks and is doing exactly that. But it is an entirely different matter for governments to allow large-scale anonymous payments, which would make it extremely hard to collect taxes or counter criminal activity". It is important to highlight the fact bitcoin could be bought for around $570 just about a year ago.

"Investors buy [an] asset because they are seduced by the prospect of further rapid gains without necessarily thinking about intrinsic value", he said. None of this applied to bitcoin, although the supply is carefully controlled.