Price of bitcoin hits all-time high above $1,700
LONDON Digital currency bitcoin jumped to a record high above US$1,200 (S$1,700) yesterday, on speculation that the first bitcoin exchange-traded fund (ETF) is set to receive approval from the US financial regulator.
Traditional financial players have largely shunned the web-based "cryptocurrency", viewing it as too volatile, complicated and risky, and doubting its inherent value.
It soared to as high as US$1,200 a bitcoin in early Asian trading on Europe's Bitstamp exchange, before easing to about US$1,190.
That put the total value of all bitcoins in circulation - or the digital currency's "market cap", as it is known - at close to US$20 billion, around the same size as Iceland's economy.
Some analysts say regulatory approval of a bitcoin ETF would make the currency relatively attractive to the often more cautious institutional investor market.
Three ETFs that track the value of bitcoin have been filed with the US Securities and Exchange Commission for approval.
It will decide by March 11 whether to approve one filed almost four years ago by Internet entrepreneurs Cameron and Tyler Winklevoss.
If approved, it would be the first bitcoin ETF issued and regulated by a US entity.
"If approved, this would give a dramatic condoning of bitcoin by the authorities and powers that be," digital currency analytics firm Cryptocompare chief executive Charles Hayter said.
"Perhaps key would be the institutional money, which would flow into bitcoin.
"This would bring a certain amount of stability eventually but could see short-term exuberance by retail traders," he said.
Over the past year, bitcoin's biggest daily moves have been about 10 per cent - volatile compared to traditional currencies but lower than the daily swings of up to 40 per cent seen in 2013.
Bitcoin climbed 125 per cent last year, outperforming every other currency.