Seoul: The digital gold, Bitcoin, surpassed a $5,000 value mark, but within 10 minutes of reaching the record high, it turned back to $4,867.19.
As per the reports, the high valued cryptocurrency got a massive 400% growth in value terms due to increased interest from major financial institutions over crypto currencies backed by blockchain technologies in a bid to have more secure transactions.
Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street have joined UBS, BNY Mellon, Deutsche Bank, Santander, NEX, and blockchain startup Clearmatics in a project to create a “utility settlement coin”.
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However, market analysts are still apprehensive about the Bitcoin’s future, having fears that the sudden jump in its value might lead to a meltdown like the dotcom bubble. While Bank of America, Merrill Lynch’s commodity and derivatives strategist Francisco Blanch is optimistic on the Bitcoin.
Bitcoin has the potential to become a new reserve currency, provided it meets three criteria— safety, liquidity and return.
Since 2012, daily trading volumes for Bitcoin have multiplied by five to $2 billion a day. Additionally, the market capitalisation of all cryptocurrencies has increased from around $20 billion at the start of this year to around $90 billion, CNBC reported.
But, safety is still a concern. After an increasing number of cyber hacking and ransomware attacks, Bitcoin traders fear losses if iron-clad security infrastructure is not in place to facilitate secure transactions.