Cryptocurrency Bitcoin is currently trading at more than $43,000 per coin after a remarkable spike in price over the past four weeks.
The digital currency had been gaining slowly but steadily throughout much of the COVID-19 pandemic, as some investors theorised the coin would be unaffected by the virus as it was not tied to the economic management of a national government.
In early October, Bitcoin was trading around $15,000.
In just three months the cryptocurrency has added more than 185 per cent in value, causing many to say the coin is on track to gain legitimacy from web-based bubble investing to a genuine forex option.
Dan Petrie, chief information officer of financial charting app Grafa, said value in Bitcoin was being driven by younger investors.
“While volatility in Bitcoin has been widely reported on, the popularity of cryptocurrencies and subsequent applications of blockchain technologies within the wider digital economy have been growing at unprecedented levels,” Mr Petrie said.
“The appreciation in the price of Bitcoin is arguably built on a greater acceptance of digital tokens as well as a burgeoning class of investors who are not wedded to a traditional view of what constitutes a good or bad asset class.”
But investing in Bitcoin is not without risk.
In late 2017 the cryptocurrency spiked at more than $25,000 before dropping to $10,500 a month later – essentially wiping more than half its value in 30 days.
Explained: What is Bitcoin?
1. Bitcoin is a form of online cryptocurrency that allows money to be transferred electronically. It’s decentralised, which means no-one regulates or controls it except for market demand.
2. It was created by a group (or a single person) of programmers under the pseudonym “Satoshi Nakamoto” in 2009.
3. Bitcoins are “mined” by computers that solve incredibly complex mathematical equations. Like coal or oil, there is a limited number of Bitcoins available to be mined, estimated to be in the ballpark of 21 million.
4. You cannot mine Bitcoin on your home computer, it requires specialised programs and hardware that have increased the difficulty of mining a Bitcoin.
5. Bitcoin experienced a dramatic explosion in value in late 2017, before it experienced one of the most catastrophic value crashes ever seen in currency.
The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.