Bitcoin, the grandfather of the cryptocurrency market, continues to rise to unprecedented highs. The controversial digital currency platform is now valued at more than $5,000 per unit.
This has been a banner year for cryptocurrencies. Bitcoin and Ethereum, along with a handful of other less well-known cryptocurrencies, enjoyed meteoric rises in value. In just over a year, Bitcoin has risen nearly 1,000%, and Ethereum enjoyed similar gains over the course of the year.
The rapid rise in the value of these alt-coins spurred a ton of controversy this year. The days of mining Bitcoin with your GPU are long behind us, but Ethereum’s Ethash algorithm is well suited for GPU-based mining. When Ethereum’s value rose to triple digits, people started buying up GPUs by the truckload, which caused a worldwide shortage of graphics cards and prompted AMD to change its marketing strategy for Vega to avoid runaway pricing.
Bitcoin also had its fair share of ups and downs, the most recent of which happened in early September. At the beginning of the month, Bitcoin seemed poised to break the $5,000 mark for the first time, but on September 14, BTC China, one of the largest cryptocurrency exchanges in the region, announced that it would shut down on September 30. The announcement kicked off a panic sell from people trying to get their money out before the exchange closed down, which caused the global value of Bitcoin to plummet. In a matter of hours, Bitcoin’s value tanked by more than $550, and it continued to drop for the remainder of the day. In the wee hours or September 15, Bitcoin was trading for as low as $3,072.
When we reported on the drop in September, we posited that sudden drops in value could pose a great opportunity for Bitcoin faithfuls, and sure enough, the following day, Bitcoin regained some of its market value. Now, it’s worth more than ever. For the first time, Bitcoin hit and promptly surpassed $5,000 value. Last night, the cryptocurrency was trading at roughly $4,850, but today it's upwards of $5,250.
The rapid increase in value is largely due to a major announcement from one of the most prominent US cryptocurrency exchanges. Early today, Coinbase announced that it is now able to accept money directly from US bank accounts to purchase Bitcoin, Ethereum, and Litecoin--up to $25,000 worth (opens in new tab). Before this announcement, Coinbase could accept payments from credit cards only, and those purchases were subject to much lower limits and transaction delays.
Coinbase’s instant bank transaction system is now live, which explains the rapid increase in purchase volumes. It’s not much easier to invest in cryptocurrency, and it’s obvious the market is hungry for easier ways to buy into this new store of value.