NEW YORK: Bitcoin surged to a record high of more than $6,000 on Friday, pushing its market capitalization to $100 billion at one point, as investors continued to bet on an asset that has a limited supply and has paved the way for a whole slew of crypto-currencies.
The original virtual currency has gained over 500 percent this year, more than any other tradable asset class. Bitcoin though is very volatile – posting gains and losses as high as 26 percent and 16 percent respectively on any given day.
On Friday, bitcoin hit a record peak $6,000.10 on the BitStamp platform, and was last at $5,964.24, up 4.7 percent on the day.
Bitcoin is a digital currency that can either be held as an investment, or used as a foundation for future applications through the blockchain, its underlying technology. The blockchain is a digital ledger of transactions.
It is scarcer though than most people realize. The number of bitcoins in existence is not expected to exceed 21 million.
Analysts said it was a combination of factors that drove Friday’s surge in price.
Over the summer, China has banned the practice of raising capital through the sale of tokens to the public in what is known as initial coin offerings. It has also ordered the shutdown of digital currency exchanges.
But many in the market believe the Chinese ban is temporary.
A big part of bitcoin’s recent surge was the ICO craze, which exploded this year. Bitcoins and ether, another digital currency, are used to purchase tokens for ICOs.