With yesterday’s spike, the cryptocurrency now has a total market value of about $217billion, following a more than 1000percent surge since the beginning of this year.
According to a World Bank report, New Zealand was worth $185bn in 2016. The GDP value of New Zealand represents 0.3percentof the world economy.
Neil Wilson, a senior market analyst at ETX Capital, said there would be a regulatory crunch for Bitcoin at some point and the development of regulated derivatives only accelerated by bringing it into the mainstream.
”More broadly, the US government, in particular, exerts huge control over not just global financial markets but wields power in wider diplomatic, economic and military terms by controlling the supply of US dollars and the financial networks. It is not about to relinquish this to a handful of unidentified crypto enthusiasts unless it’s got a sizeable stake in Bitcoin itself,” Wilson said.
A new study from Juniper Research has found the value of cryptocurrency transactions were expected to surpass $1trillion in 2017, more than 15 times the level in 2016.
Bitcoin began the year at less than $1000 per token, but it has been on an absolute tear in recent months. It crossed $5000 in October and touched above $11000 for the first time less than two months later.
Bitcoin’s ascent, however, has not been without speed humps. Countries such as Morocco, Bolivia, Kyrgyzstan, Ecuador, Bangladesh and Nepal have banned bitcoin.
China earlier this year announced the closure of domestic cryptocurrency exchanges. While the powerhouse hasn’t outlawed bitcoin, it has made trading or owning bitcoin a real challenge for its citizens - and bitcoin is banned for banking institutions.
Francois Groepe, the deputy governor of the South African Reserve Bank, recently said it would be too risky for the central bank to start issuing virtual currencies or cryptocurrencies at the moment. Co-Pierre Georg, a senior lecturer at the African Institute for Financial Markets and Risk Management at UCT, said there was a huge risk that bitcoin was already overvalued.
“Despite the claim that bitcoin is a 'global currency', the reality is that 58percent of all bitcoin mining happens in China," Georg said.
- BUSINESS REPORT