Bitcoin may be a currency without much in the way of physical, real world value, but as with everyone, something’s worth is defined by what someone is willing to pay for it. And apparently people are willing to pay more and more for Bitcoins, as the value of the digital money is still growing.
At the time of writing, it’s passed the $45 mark and is closing in on $50 per Bitcoin. This represents unprecedented growth, since if you went back just over a year, you’d find it priced at around $5 per Bitcoin. It took until August 2012 for the $10 mark to be reached, but since January, where it hovered just under the $15 mark, we’ve seen explosive growth.
It was only two weeks ago that we reported on the new Bitcoin value record, hitting just over $32 (£21.50) and that has been breezed past now. It did look like the growth was going to plateua and tumble a few days ago when over $8,000 worth of Bitcoins was stolen from one exchange. Indeed it did see a minor drop of a couple of dollars, but the market soon recovered.
What is driving such exponential growth is up in the air at the moment. Some believe it’s to do with high profile sites like Reddit and WordPress accepting donations in the currency. Other’s believe it’s just the case that when the value starts to increase, people see it as an investment opportunity and jump on the bandwagon – so as demand goes up, so does Bitcoin’s value.
Whatever it is though, anyone looking to throw money at the currency should be wary. Back in 2011, Bitcoin’s worth crashed from $30 to $3 in a matter or days. While it may be an unregulated currency, there isn’t much in the way of standards to maintain value, so invest at your own risk.
KitGuru Says: Any of you guys purchased Bitcoins before and if so, what did you use them for?