The value of Bitcoin is rapidly rising, with the digital currency reaching a record value of above $9,000 per coin. Since the beginning of the year alone, the bitcoin value has risen by approximately 860% - this past July, the bitcoin was worth about $3,000. Such an increase has Wall Street analysts predicting that the value of Bitcoin in 2018 will increase to $14,000 per coin.
Although the bitcoin is purely digital and not insured by the Federal Deposit Insurance Corporation (FDIC) like banks are, the increase in bitcoin is attracting investors across the world. Billionaire magnate Mark Cuban, who currently owns the American basketball team Dallas Mavericks, proposes that the bitcoin's rise is due to its virtue as a keepsake rather than a trading item. In response to the surge in bitcoin, Cuban notes that "the number of people opening up new accounts and buying bitcoin, even fractionally, is skyrocketing. Yet the people who have it as a true store of value have no reason to sell it as long as demand continues." In fact, a recent survey has found that the average Bitcoin investor will not sell their Bitcoin until it reaches a value of $196,165.
Investors such as Cuban and JP Morgan
The doubt surrounding the value of Bitcoin chiefly concerns its volatility as a trading currency. While the coin has reached new heights in value, it has often gone through dramatic plunges due to attempted government regulation, geopolitical events, and anxiety over possible security violations. This past September, the Bitcoin value fell 20% with the Chinese government's closer enforcement of domestic exchanges across the country. Similar to the volatility of traditional stock trading, the price of the Bitcoin is heavily impacted by changes across the world. When the popular Bitcoin exchange Mt. Gox disabled its trading in 2014 due to perceived theft, the price of Bitcoin rapidly decreased. Likewise, Bitcoin value fluctuates with news of security breaches. Given the spread three years ago of the Heartbleed bug, a virus that threatened the software library OpenSSL that secures communications across computer networks, many investors panicked about the safety of their identities in relation to their Bitcoin use. Bitcoin decreased in value by 10% in response to the bug.
New strides are being made with the Bitcoin currency despite its volatility. The financial market company Chicago Mercantile Exchange