Bitcoin Breaches New Milestone by Smashing Past $5,000 Mark

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  • Value of largest cryptocurrency has risen five-fold this year
  • Sentiment helped by Goldman Sachs plan to help clients trade

Moulton: Bitcoin Will Have to Evolve to Survive

Bitcoin surged to a fresh record Thursday as the enthusiasm for cryptocurrencies showed little sign of abating.

The world’s largest cryptocurrency rose as much as 8.4 percent and was trading 7.9 percent higher at $5,209 as of 12:34 p.m. in London, resuming gains after a one-day break. As recently as December, bitcoin was trading at less than $1,000 dollars.

Bitcoin tumbled below $4,000 last month after China’s central bank banned initial coin offerings and ordered all cryptocurrency exchanges to close. Recent reports that Goldman Sachs Group Inc. is exploring how it could help its clients trade cryptocurrencies are now helping sentiment.

“Everyone seemed to agree that once it broke through $5,000, the sky is the limit. I wouldn’t be surprised to see it double from here in a very short space of time,” said Ben Kumar, a money manager at Seven Investment in London, who invests in Bitcoin in an individual capacity. “There’s a long time to run before people get tired of chasing the next big thing.”

Read More: Bitcoin Retaking Place as Crypto King as Smaller Tokens Slide

The digital currency’s 440 percent surge this year has divided the financial community between those convinced it is a bubble on the verge of popping and those looking for ways to piggyback on its success. Goldman Sachs is in talks with cryptocurrency experts but hasn’t yet formulated a business plan, a timetable for implementation or made any bitcoin-related investments, a person briefed on the plan said earlier this month.

What happens from here depends a lot on how governments decide to regulate the virtual currency, Kenneth Rogoff, professor of economics and public policy at Harvard University, wrote in a column published in Project Syndicate this week. Global efforts to regulate digital money have accelerated in the past month since China’s ban.

Read more: Bloomberg’s Quicktake on bitcoin and blockchain

At least 13 other countries have imposed new rules or announced plans to tighten regulations. Russian President Vladimir Putin this week called for regulation of cryptocurrencies, but stopped short of backing a broad ban.

“It’s a very speculative market,” Jon Moulton, a U.K.-based private equity veteran who owns bitcoins, said in an interview with Bloomberg TV’s Francine Lacqua. “It’s going to be a very volatile asset for a long time.”

(Updates with background from fifth paragraph.)