The price of bitcoin has smashed through $5,000 to an all-time high.
The cryptocurrency rose by more than 8% to $5,240, having started the year at $966. Bitcoin has soared by more than 750% in the past year and is worth four times as much as an ounce of gold.
But the price has been volatile. The digital currency plunged below $3,000 in mid-September after the Chinese authorities announced a crackdown. Beijing ordered cryptocurrency exchanges to stop trading and block new registrations, due to fears that increasing number of consumers piling into the bitcoin market could prompt wider financial problems.
Vladimir Putin, the Russian president, this week called for regulation of cryptocurrencies, saying their use “bears serious risks” such as money laundering, tax evasion and funding for terrorism. But he also warned against imposing “too many barriers,” which appears to have given bitcoin a boost.
Despite warnings over a bubble, bitcoin is gaining in acceptance. Last month, a London property developer, The Collective, said it would allow its tenants to pay their deposits in bitcoin and accept rent payments in the cryptocurrency by the end of the year.
Two weeks ago, Japan’s government implemented rules that recognise bitcoin as a payment method. Celebrities have also got involved, with the boxer Floyd Mayweather, the socialite Paris Hilton and the actor Jamie Foxx promoting coin offerings.
Using bitcoin allows people to bypass banks and traditional payment processes to pay for goods and services directly. Banks and other financial institutions have been concerned about bitcoin’s associations with money laundering and online crime because transactions take place anonymously.
The soaring value of bitcoin and other cryptocurrencies comes despite growing warnings over a price bubble.