Bitcoin was valued at 6 cents in 2010 but passed the $5,000 mark for the first time this weekend, although the high was short lived dipping back down to $4,867.19, Coindesk reported.
Bitcoin has surged in value this year mainly thanks to interest from the major financial institutions into crypto currencies that are backed by blockchain technologies to facilitate secure transactions.
Several major banks including Barclays and Deutsche Bank have joined together to create a “utility settlement coin”, while Kasikorn Bank in Thailand has also been developing its own blockchain technology.
Many market analysts are still sceptical about the future of Bitcoin fearing that the sudden surge in value may be followed by a “dotcom like” bubble burst. However, others precit that its value will only continue to rise.
In a recent note to investors, Goldman Sachs’ investment arm said: “Whether or not you believe in the merit of investing in cryptocurrencies (you know who you are), real dollars are at work here and warrant watching.”
The news comes after another rising cryptocurrency, Ethereum, also hit a new high of $400
Last month, the underlying software code that is used for Bitcoin was split and a new cryptocurrency, Bitcoin Cash, was launched.
According to Reuters, the initiative was headed by a small group of mostly China-based bitcoin miners – programmers who essentially operate the bitcoin network – who were not happy with scheduled improvements to the currency’s technology meant to increase its capacity to process transactions.
These miners, who get paid in the currency for contributing computing power to the bitcoin network, initiated what is known as a “fork”.