Bitcoin Passes $1,000/Coin
Are crypto-currencies such as "Bitcoin" simply in mania mode right now, or is there a paradigm shift taking place that will continue to drive the price of these coins even higher?
The price of a single Bitcoin continues to surge today, as the crypto-currency is currently trading for roughly $1,150 on the Mt.Gox exchange. The coins touched a high of $1,224.60 earlier today.
Over the past month, the price of a single Bitcoin has risen from roughly $200 to its current level of over $1,100. So, if you just so happened to purchase a couple of Bitcoins in late October, you are now looking at a return on your investment of roughly 450%.
As we've mentioned before, there are a number of reasons for this recent surge. The emphatic incursion of the Chinese into the Bitcoin market has certainly helped push the price of the coins higher, as did the declaration from a US Senate committee hearing that the crypto-currency was "legitimate". Both of these recent events have conspired to push Bitcoins into the stratosphere. There are roughly 12 million Bitcoins in circulation, but in reality, there are scant few to be bought, and this supply/demand imbalance has resulted in soaring prices.
You may or may not be aware that there are "alt-coins" that have popped up in recent days, months and years.
Bitcoin is, by far, the biggest and most commonly used crypto-currency in the world, as the currency currently has a market cap of roughly $13 billion.
There are, however, a number of other coins that are trying to establish legitimacy as well. Some of the names of these coins include:
Litecoin is, by far, the biggest of the "alt-coins" (in terms of market cap anyways), as the roughly 23.4 million Litecoins (LTCs) in circulation currently have a value of $42.28, which gives them a market capitalization of nearly $1 billion.
One other coin, Namecoin, currently has a market cap of over $100 million.
As you probably could have guessed, the prices of many of these "alt-coins" have surged in recent weeks thanks to the success of Bitcoin.
For instance, the price of a single Litecoin has surged by nearly 60% over the past 24 hours, while a single Namecoin has increased by nearly 100% over the same time period.
There are many smart people who believe that Bitcoins will rise much, much further, while others believe that they are due for a massive plunge.
The long-term value of a single Bitcoin is certainly up for debate, but there is no question that the currency is currently experiencing a full-blown mania as speculators thunder into the market.
It will certainly be interesting to see how this all turns out.
Filed under: General Knowledge