Liu Xiao and Wu Yujian via Caixin | After a tumultuous year, the price of bitcoin surged past $10,000 on Wednesday morning Beijing time, growing more than tenfold from the beginning of the year.
The rise came despite the cryptocurrency market being dealt repeated blows this year. In September, the price of bitcoin dived after Chinese regulators put curbs on fundraising and the trading of cryptocurrencies. Another dip followed in mid-November, after a faction of programmers in the bitcoin community dropped a joint effort to improve processing speeds because the attempt failed to gather enough supporters.
But the bitcoin price has risen rapidly for the past two weeks on increasing demand. Around 100,000 new accounts were added between Nov. 22 and Nov. 24 alone at Coinbase, the biggest bitcoin exchange in the U.S., bringing the total number of accounts at the platform to 13.1 million, more than double what it was recorded a year previously, according to a report by CNBC over the weekend.
Investors’ confidence was bolstered when CME Group, a major derivatives exchange operator, announced plans to launch bitcoin futures by 2018 at the end of last month. The plan is currently awaiting approval from the U.S. Commodity Futures Trading Commission. Before that, Japan recognized cryptocurrencies as legal tender in April.
Bitcoin derivatives will attract more heavyweight investors, which will gradually reduce the cryptocurrency’s volatility, and increase its liquidity and ease of exchange with fiat currencies, said Wang Liren, senior researcher at the China Blockchain Research Alliance.
Bitcoin operates on blockchain technology, which eliminates the need for a central authority by verifying and recording transactions through a network of computers. Previous transactions can be seen by everyone on the network and are unchangeable once they have been confirmed.
Bitcoin’s market capitalization reached $181 billion on Wednesday afternoon Beijing time, accounting for 55% of the total value of the 1,326 cryptocurrencies traded worldwide, according to data provider CoinMarketCap