Surging Bitcoin hits US$10,000 mark for first time

A single Bitcoin is now worth US$10,000. Photo / Bloomberg

A single Bitcoin has hit $10,000 ($14,496) in value for the first time in the cryptocurrency's history.

The digital money was trading at $10,009 ($14,510) per coin on the CEX IO exchange this morning, before dropping back down below this watershed mark.

Over this past year, Bitcoin has seen its worth increase by 1,000 per cent and it is continuing to attract investment, according to the Daily Mail.

One former hedge fund manager believes it could "easily" reach US$40,000 ($57,996) by the end of 2018.

But the dramatic rise has spared fears of a dangerous bubble which could end in huge losses.

Bitcoin has seen a surge of activity in recent weeks, rising in value exponentially.

For comparison, in July 2010, one Bitcoin was worth only $0.08 (12 cents).

Yet the number of transactions involving the currency have not grown at a similar pace.
This suggests that it is mainly being used as an investment, rather than paying for online shopping or other goods and services.

Former Fortress hedge fund manager Michael Novogratz believes Bitcoin's value could multiply more than four times over the course of the next year.

Speaking to CNBC, he said: "Bitcoin could be at US$40,000 ($57,996) at the end of 2018. It easily could.

"There's a big wave of money coming, not just here but all around the world."

Bitcoin has seen an eye-watering tenfold increase in its value since the start of the year and financial experts have warned over the expanding bubble.

Thousands of amateur traders are now piling in and betting huge amounts, while start-up companies are using bitcoin to raise money and avoid the transparency needed in a stock market float.

But experts fear that the currency has become a vast speculative bubble detached from reality.

Watchdogs across the world have warned there could be a sudden massive crash if the market turns.

Economist Nouriel Roubini, who predicted the financial crisis, has described the fad for online currency as a "giant speculative bubble" which is bound to end in disaster.

He said: "This is neither a serious method of payment nor a good way to store capital. The bitcoin feeds on itself.

"There are no fundamental reasons for its price to reach such levels."

Roubini said the lack of regulation made the currency popular with crime gangs looking to launder money.

These warnings have done nothing to dampen enthusiasm, whipped up by celebrities who have endorsed online currencies.

Boxer Floyd Mayweather, actor Jamie Foxx and reality TV star Paris Hilton have all tweeted their support for bitcoin.

Football manager Harry Redknapp – who has previously claimed he doesn't know what an email is or how to send a text message – tweeted support for a lesser-known currency called electroneum.

Watchdogs around the world are starting to take action on bitcoin trades out of fears that it is being used to fund crime and that vulnerable people are being lured into gambling away their savings.