Bitcoin can’t stay out of the headlines at the moment. Today it has now broken another landmark of $12,000 per token. That is a 12000 times growth this year.
Starting at below $1000 in January is has seen an exponential growth this year as hype for the cryptocurrency gets out of control. In October it broke $5000 and just two months later it has more than doubled in price.
With Wednesday morning’s spike, the cryptocurrency now has a total market value of about $203 billion — more than twice Goldman Sachs’ market cap.
At the same time, Governments are starting to realise they can not ignore the importance of this new currency. Here in the UK, the Government plans on regulating Bitcoin and other digital, decentralised currencies with plans to eliminate the anonymity of users to curb money laundering and other illegal activities.
The official statement from the Treasury states:
We have clear tax rules for people who use cryptocurrencies, and like all tax rules, these are kept under review. We also intend to update regulation to bring virtual currency exchange platforms into anti-money laundering and counter-terrorist financing regulation.
And Stephen Barclay, the UK’s Economic Secretary has said:
The UK government is currently negotiating amendments to the 4th Anti-Money Laundering Directive that will bring virtual currency exchange platforms and custodian wallet providers into Anti-Money Laundering and Counter-Terrorist Financing regulation, which will result in these firms’ activities being overseen by national competent authorities for these areas. The government supports the intention behind these amendments. We expect these negotiations to conclude at EU level in late 2017/early 2018.
One of the original selling points of this cryptocurrency was the privacy it affords, so these changes will no doubt irk some users. However, this could also be seen as a positive movement for many investors as it helps legitimise Bitcoin as a legitimate currency.
Many economists are warning about the dangers involved with investing in the currency, it is exhibiting a strong speculative bubble trend, and it is thought that the bubble has to burst sooner or later.
Unfortunately for people such as myself who thought the bubble would burst closer to $1000, Bitcoin seems to just keep on going and going. Stephen Roach of Yale University has even said:
I’ve never seen a chart of a security where the price really has a vertical pattern to it. And bitcoin is the most vertical of any pattern I’ve ever seen in my career.