Hong Kong — Bitcoin neared its all-time high on Thursday, with the surging digital currency tipped to become a new safe haven asset as the world grapples with growing economic uncertainty.
It broke the $1,100 barrier on the Bitcoin Price index, an average of major exchanges, to continue a dizzying rise that made it the best performing currency of 2016.
It has fluctuated wildly since it was created in 2009 and lost three-quarters of its value when it plummeted from its previous high of $1,165.89 in 2013. And news of a major bitcoin theft by hackers in August sent its price plunging by more than 20%.
But analysts say its volatility will ease as volumes grow and point to a strengthening US dollar and tightening currency and capital controls, as well
as the rise of the digital economy, as major factors behind its appreciation.
In particular, the chaotic withdrawal of high-value bills in India and restrictions on buying foreign currency in China as the yuan slides against the dollar have stoked demand, analysts say. Worsening the rocketing demand is a tightening supply of fresh bitcoins.
The currency was always meant to be finite, and more than three-quarters of the planned 21-million bitcoins have already been "mined".
Encrypted digital coins are created by supercomputers and then traded online or exchanged for goods and services.
Vinny Lingham, a bitcoin expert and CEO of US digital identity protection start-up Civic, highlighted the effect of wider geopolitical uncertainty, such as US president-elect Donald Trump’s potential threat to emerging markets. He has predicted bitcoin will be worth about $3,000 by the end of 2017. "Bitcoin is reacting as a safe haven," he said.
AFP
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