Digital Currency Bitcoin Hits New Record High Of $50,000

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Digital currency Bitcoin has risen to a new record high of more than $50,000 (£36,000).

The so-called cryptocurrency, which was created by an unknown inventor, has risen about 72% this year.

Bitcoin and other cryptocurrencies are generated by computers. Part of its supposed value comes from the finite number that can be computed.

But regulators have warned that they are risky, since their value can change fast, both downwards and upwards.

Much of this year’s gain for Bitcoin came after Elon Musk’s Tesla bought $1.5bn of them and said it would accept them as payment for its cars.

Supporters say Bitcoin can act as a store of value, like a digital version of gold.

“If that narrative comes to fruition, then the growth potential is off the charts as $50,000 per bitcoin equates to a market cap of roughly $931bn, which is almost 9% of gold,” said John Wu, president at blockchain company Ava Labs.

“If BTC meets gold’s market cap, then that would be at least $500,000 per bitcoin.”

Digital Currency Bitcoin Hits New Record High Of $50,000.

‘Explosive growth’

Unlike other commodities, however, Bitcoin cannot be used for anything else, merely bought and sold. This has made attempts to value it difficult.

PayPal allows Customers to buy and sell Bitcoin, Cryptocurrencies on its platform

Crypto-currency like Bitcoin, falls within the regulatory purview of the Central Bank

Pricing is also susceptible to large swings because of the limited number which are traded. Many supporters are holding on to them in anticipation of higher valuations. Should they all sell at once, the price could tumble.

With no intrinsic value, unlike a physical asset such as land, and no ability to generate an income, unlike a company or bond, cryptocurrencies are extremely volatile and can crash as fast as they rise.

Critics point out that while Bitcoin may have a finite supply of units – 21 million – the number of cryptocurrencies is ever-growing and potentially limitless.

People have lost large amounts of money in steep drops in the value of cryptocurrencies and in hacks and scams associated with them.

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