Investors in bitcoin could be in for a major profit boost following the tripling in value of the cryptocurrency since January.
The unstable virtual currency, which plummeted more than 70 per cent in 2018, has enjoyed a phenomenal rally since the turn of the year.
Its value has gone from $3,714 – roughly £2,966 – at the start of January to a high of $12,444 – roughly £9,938 – in the end of last month, thought to have been fuelled in part by Facebook’s announcement that it is to launch its own currency, Libra, in 2020.
Today, its value stands at $11,369 – roughly £9,079.
Bitcoin, which exists only in the digital world as computer code, was launched in 2009 by Satoshi Nakamoto and was the world’s first decentralised cryptocurrency.
Its value has fluctuated wildly since its creation, and its value last month was the highest since March 2018, where it reached $11,557 – roughly £9,230 – before plummeting dramatically to $3,193 – £2,550 by December 2018.
However, despite the wild fluctuation and the chance for huge losses for investors, bitcoin’s advocates believe it has the power to revolutionise money.
It is not controlled by national governments or central banks and so is seen as a way of keeping money out of the hands of financial authorities.
Facebook’s announcement last month of the launch of its own cryptocurrency prompted a further rise in bitcoin’s value.
Jehan Chu, co-founder digital currency investor Kenetic Capital, said: ‘The price surge is due to two major factors.
‘One is an increasing consensus among the investment community that bitcoin is a legitimate store of value for the digital age, and two, Facebook’s Libra cryptocurrency launch has forced every chief executive to take crypto seriously.’
Facebook joined forces with 28 partners in a Geneva-based entity called the Libra Association, which will govern the new digital coin.
It will be backed by a reserve of existing currencies from around the world, likely including the US Dollar, the Euro and the Yen.