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article imageBitcoin breaks $16,000 barrier with new record high

By Ken Hanly     Dec 7, 2017 in Technology
Thursday morning bitcoin broke through the $15,000 barrier. In fewer than 12 hours, or just half a day, the coin's price rose more than $2,000.
Bitcoin's phenomenal price rise
Bitcoin's price is now more than 15 times that it was at the beginning of 2017.
Earlier this week, as reported in the Digital Journal, the price of the coin bridged the $12,000 level with many commentators predicting an imminent crash or correction.
However, yesterday as reported by Forbes, bitcoin crashed through not just the $13,000 level, but $14,000 as well. It went as high as 14,095.61 on the CoinDesk Bitcoin Price Index (BPI). On Korean exchanges the price soared over $17,000.
This morning, Thursday December 7th, the price reached $15,344 on a Luxembourg-based exchange.
Present price of bitcoin
Even while I write this before eleven a.m. Central Time, bitcoin has broken through the $16,000 barrier.
At 16:16 UTC Coindesk reports the bitcoin price at $16,242 and the trend was up. The price at opening was $13,708. The rise so far is 18.47 percent.
Why is the price going higher?
Some analysts say that the weekend launch of bitcoin futures by CBOE, one of the world's largest derivatives exchanges, may result in more investors coming into the market and thus boosting the price.
Charles Hayter, of the cryptocurrency data analysis firm Cryptocompare said: “Futures trading will mean more demand... and is a form of ratification of the underlying tech - bitcoin and cryptocurrencies in general. They are now on the main stage.”
However, futures trading can be a double-edged sword as it allows investors to take speculative short positions that could drive down the price or produce even more volatility.
Naeem Aslam of Think Markets said: "Aggressive traders, such as hedge funds and algorithm-driven funds, (will be able) to use this futures market to enter bitcoin trading with high levels of liquidity for aggressive short-selling and knock the prices really low. Players now have an incentive to be on the short side and make profits hedging against the upside.”
With these huge rises, and considerable volatility, some short-selling investors may decide to sit on the sidelines for now.
Increasing market cap for bitcoin and cryptocurrencies
Bitcoin now has a market cap — which consists of its price times the number of bitcoins in circulation — that is far greater than $260 billion according to the website Coinmarketcap. This is a market value greater than Visa, at least in theory.
Coinmarketcap now places the value of all cryptocurrencies at $415 billion.
No doubt we are overdue for a correction in the price of bitcoin but so far there is only an amazingly long run of new highs.
UPDATE: The price on Coindesk a little after eleven Central Time appears to have corrected, and the price was way down at $15, 381. The price is extremely volatile. Check yourself at the link. The price has topped out at $16,615, for now.
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