The digital currency Bitcoin has now breached the US$2,100 mark thanks to continuing strong demand from Japan and China. Japan accounted for nearly 55 percent of trade volumes recently, where Bitcoin is now recognised as legal currency.
But to highlight the volatility, after hitting a fresh record-high of US$2,230 in US trade, it tumbled over 10% to as low as US$2,001 before rebounding yet again. Now it is up again at US$2,143 having added over 5% in just the past couple of hours.
The longer term trend is clear.
Bitcoin had already lifted to USD$1,900 last week when reports of possible political scandal in the U.S. and Brazil drove traders to safe commodities so Gold futures rose more than 2 percent. But some are now suggesting that Bitcoin may soon be seen as a competitor for gold in a flight to safety.
In addition, Bitcoin traded on the Hong Kong-based Bitfinex will soon be easily converted to U.S. dollars and this has the potential to narrow spreads and lift volumes further.
Remarkable to think that this highly volatile digital currency may be seen in the same category as gold!
