Bitcoin Outperformed All Bank-Issued Currencies in 2016

January 5, 2017
Submitted by: Love Knowledge
Category: Politics

In Brief

• According to a Reuters report, digital currency Bitcoin grew by 125 percent to a value above $1,000 in 2016, crossing that threshold for the first time since 2013.

• The Bitcoin market has been historically volatile due to large-scale thefts, a sign that more safeguards must be put in place before digital currency can ever become ubiquitous.

The value of digital currency Bitcoin has crossed the thousand-dollar line for the first time since December 2013. As of this writing, a single Bitcoin is worth $1114.95, growing by 125 percent in 2016 to perform better than all central bank-issued currencies, according to Reuters.

Bitcoins are not controlled by any government or central authority, which makes the cryptocurrency very attractive for those looking to mobilize money without their country’s capital restraints. Reuters reports that the increase in value could be largely due to strong demand from China as a response to the yuan sinking by 7 percent in 2016.

Paul Gordon, co-founder of digital currency investment company Quantave and board member of the UK Digital Currency Association, told Reuters that “the growing war on cash, and capital controls, is making Bitcoin look like a viable, if high risk, alternative.”

Convenience aside, the history of the Bitcoin market is one riddled with volatility. The digital currency clocked in its highest value at $1,163 in 2013, only to suddenly collapse to the neighborhood of $400 due to a massive $460 million-in-Bitcoin theft from the Tokyo-based exchange Mt. Gox. It has stabilized in recent years, though, despite another incident involving the loss of Bitcoins worth about $65 million last August.

The market continues to grow, with 12.5 Bitcoins being added every second. More safeguards must be put in place to prevent major leakages, though, especially since the future of currency is digital and, so far, Bitcoin is leading that transition.

Last modified on Thursday, 05 January 2017 16:23