Bitcoin Breaks $1,000 Level, Highest in More Than 3 Years (cnbc.com)

The price of digital currency bitcoin has hit the $1,000 mark for the first time in three years. From a report on CNBC: The cryptocurrency was trading at $1,021 at the time of publication, according to CoinDesk data, at level not seen since November 2013, with its market capitalization exceeding $16 billion. Bitcoin has been on a steady march higher for the past few months, driven by a number of factors such as the devaluation of the yuan, geopolitical uncertainty and an increase in professional investors taking an interest in the asset class. "We are seeing the aftermath of zero interest rates run amok. So bitcoin is a healthy reminder that we don't have to hold on to dollars or renminbi, which is subject to capital controls and loss of purchasing power. Rather it's a new asset class," Bobby Lee, chief executive of BTC China, one of the world's largest bitcoin exchanges, told CNBC by phone.

Comments

Speculators

[Anonymous Coward]

So long as speculators can make money holding onto bitcoin while the value shifts, it will not be a viable means of exchange. Currencies need a stable value for people to want to use them as a currency.

Re:Speculators

[supremebob]

If you look at the Bitcoin price charts, you see that it tends to crash in value quickly after rising for some time.

To me, it looks like now would be a time to dump the currency before it tanks again.

Of course, the person who wrote this article is probably a speculator themselves. They are probably hoping that they can increase their gains a bit more before unloading their holdings.

Sadly, these price swings are one of the reasons why Bitcoin doesn't really work well as an actual currency. Well, that and the fact that payment confirmations now take forever to complete unless you bribe the miners with a big transaction fee.

Re:Speculators

[Dunbal]

But rest assured, the scale itself changes day to day, sometimes even as much as stocks change day to day.

Rubbish. Currencies tend to be stable over time. It's when they're NOT stable (witness the Russian Rouble, the Euro, and the British Pound last year) that the shit tends to hit the fan. Which proves GP's point - people like STABILITY in their currencies. Instability is a sign of failure not success.

Shocking

[Luthair]

Someone involved in bitcoin thinks its relevant and people are doing big things with it. Next thing you know companies will be sending out press releases saying they're releasing great products.

Re:Shocking

[Baron_Yam]

No, the VC idiots have finally learned that Bitcoin is a way of stealing their money. The smart VC money never went there, except a few 'drop in the bucket, just in case' experiments.

Slashdot really ought to just ban these stupid 'stories'; we don't post about Beanie Baby market fluctuations, and there's nothing technically interesting left with Bitcoin to discuss. It's just the latest attempt by scammers and cultists to pump their obsession.

Pump and dump

[Anonymous Coward]

Slashdot is helping with the pump, who is out there dumping?

Hilarious

[Dunbal]

Seeing bitcoin and "professional investor" in the same sentence, as well as seeing real world economic situations used as an excuse for the latest bitcoin bubble.

It's very easy to look "professional" when the bubble is inflating. Let's see how professional they look when it pops again, as it will - because Bitcoin is SPECULATION not investment. I'm pretty sure that tulip salesmen were highly respected financial professionals in the 1630's, a few months before they turned gardener again.

Now don't get me wrong, there is nothing wrong with a bit of speculation and money can be made. However it is a universe of risk away from the term "investment" and the buyer must beware.

Dumbest comment ever in summary

[Khyber]

"So bitcoin is a healthy reminder that we don't have to hold on to dollars or renminbi, which is subject to capital controls and loss of purchasing power."

As if bitcoin isn't subject to a loss of purchasing power? As if that wasn't why the prices fluctuate so wildly?

Holy shit, the people getting into bitcoin are getting scammed harder than I thought if they're buying this economically-unsound statement.

Re:Any way to hedge USD using smart contracts?

[Aighearach]

Bitcoin as a currency has built-in deflation, so you can't peg it to anything.

There are real reasons why all the serious, real fiat currencies are managed for low inflation. Having guaranteed deflation makes bitcoin useless long-term, and it even makes it hard to understand price changes.

The supply is constrained. A bitcoin will always have more purchasing power in the future. So it can only ever succeed temporarily in "pyramid scheme" fashion. Success would mean demand, but demand cannot be sustained in those circumstances.

The only reason it is in use is because drug dealers don't realize that it is more traceable than dollars. Ignorance is not a good basis for an economy. See also: information theory (economics)

Re:Not surprised... there isn't anything capping i

[Aighearach]

Because of the moronic increasingly constrained supply over time, the price will continue to trend up even as people abandon it and demand trends down.

A normal fiat currency the price would crash until you need 10 billion Zimbabwe dollars to buy a sandwich. With bitcoin, you can't even print more; people will have to abandon it. It won't get easier/cheaper to get, either, because of the speculation premium.

If you want a new fiat currency, fine. But it has to have long-term low inflation to succeed. If it has built-in deflation then speculation will dominate the market.