Bitcoin's white-knuckle ride continues as it hurtles past $US8,000 to new record

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Bitcoin's white-knuckle ride continues as it hurtles past $US8,000 to new record

By Adam Haigh and Natasha Doff
Updated

Bitcoin's relentless and volatile rally shows no sign of abating, with the world's largest cryptocurrency defying growing bubble fears to hit yet another milestone.

Bitcoin rose as much as 7.7 per cent to a record $US8,290 ($10,980) in early afternoon trade in New York. It's been a tumultuous year for the virtual currency, with three separate slumps of more than 25 per cent all giving way to subsequent rallies.

"The inflation in this thing is massive," Luke Hickmore, a senior investment manager at Aberdeen Standard Investments in London, said in an interview with Bloomberg TV. "When will it collapse? Who knows. It will cause a lot of pain."

Even as many skeptics call the asset a bubble waiting to pop, it's becoming too big for many on Wall Street to ignore. CME Group Inc., the world's biggest exchange, will start offering futures trading on bitcoin next month, while senior executives at Goldman Sachs Group Inc. and Citigroup Inc. have said they are researching cryptocurrencies and the blockchain technology that underlies them.

Bitcoin has advanced more than 700 per cent this year and now boasts a market value of more than $US130 billion.

Bitcoin has advanced more than 700 per cent this year and now boasts a market value of more than $US130 billion.Credit: Bitcoin.com

Recent volatility has stemmed from a pickup in people switching to alternative virtual currencies, notably bitcoin cash. That's gaining popularity due to lower transaction costs and faster speed. New cryptocurrency iterations are springing up as disagreements over bitcoin's design persist and opportunities for making a quick buck prove hard to pass up.

Bitcoin cash dropped 0.6 per cent on Monday to trade at $US1,184, down from a high of $US1,388 on November 12, Coinmarketcap.com prices show. Bitcoin has advanced more than 700 per cent this year and now boasts a market value of more than $US130 billion.

"I find it remarkable and somewhat frightening how, no matter how much bitcoin is pummeled by sellers, it simply bounces back even stronger," said Lukman Otunuga, an analyst at currency brokerage ForexTime.

"Will bitcoin hit $US10,000 before year end? This is the question every investor is asking."

Bloomberg

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