Bitcoin reaches new high but bubble fears persist

Bitcoin extended its rally continued apace today, breaking above $12,000 to a record high despite concerns about the cryptocurrency’s real value and fears of a dangerous bubble.

Bitcoin received a boost last week after the main US derivatives regulator that it would allow CME Group and CBOE Global Markets to list bitcoin futures contracts.

The move opens the door to added regulation but also more mainstream adoption, as bitcoin futures and other derivatives would make it easier to trade the new asset class, Reuters reports.

Bitcoin’s meteoric ascent of over 10-fold from below $1,000 at the start of the year has drawn regulatory scrutiny around the world. 

Crypto critics

High-profile critics such as Nobel Prize-winning economist Joseph Stiglitz have said the cryptocurrency should be outlawed.

“It took a long time to establish the methodology and the way bitcoin was traded. The original appeal came from the fact they were unregulated. However, it’s clearly moved out of those shadows and into centre stage,” said Mick McCarthy, CMC Markets’ chief market strategist in Sydney.

“We are in the throes of a bubble market, and one of the characteristics of a bubble market is that there is no way to know when the bubble will burst.”

“There is a lot of money flowing into bitcoin right now, mostly motivated by fear of missing out and greed,” said Leonhard Weese, president of the Bitcoin Association of Hong Kong.