The price of one Bitcoin reached an all-time high of $269 on Wednesday, surpassing the previous record of $267 set in April 2013. Mt. Gox, one of the largest and most well-known sites for exchanging bitcoins with US dollars, reported the record high at 5:40am GMT.
Bitcoin has been steadily increasing in value over the past month, after a long period of relative stability for the highly volatile crypto-currency. At the beginning of October, one BTC was worth $145.
The closure on 2 October of the Silk Road website, which reportedly represented up to 5% of the bitcoin economy, caused a short-term crash in prices, but the currency soon recovered. Since then it has been on a rapid increase, at one point rising by 14% in a single day.
Users and observers of the crypto-currency have many theories about why the increase may have occurred. Some point to the closure of the Silk Road itself, arguing counter-intuitively that by removing a potential PR problem for Bitcoin the FBI has done the currency a favour.
Others argue that the rise is because Baidu, China’s biggest search engine, now accepts payment for some of its services in Bitcoin, giving the currency legitimacy in a new market.
A third possibility is that the rise represents a speculative bubble, akin to that seen in April when the price doubled in a week then plunged to just half of where it had begun. Under that theory, buyers see a small fluctuation and buy in, hoping to make the sort of gains which led to a Norwegian man being able to buy a house four years after a 150 NOK (£15.62) investment in Bitcoin. Those purchases drive the price up, leading to more people buying in hoping to make gains, and so the cycle continues.
Source: The Guardian
