Bitcoin’s value continued its relentless march higher as it topped $4,000 for the first time. Although there is a great deal of anxiety about its gravity-defying improvements, the currency sometimes rises over 10% a day
The continuing surge in the price of bitcoin has seen it climb to over $4,000 for the first time since the cryptocurrency was created in January 2009.
According to the CoinDesk Bitcoin Price Index, the average price of bitcoin across global exchanges today reached a height of $4,225 at 9:07 a.m. UTC, having opened at $3,917. At press time, the price had dropped slightly to $4,162.
The new record follows days in which bitcoin has been setting consecutive all-time highs following a relatively static period when prices sat at around $2,700. That lull indicated a cautious market the approach to the bitcoin fork that created a new cryptocurrency, bitcoin cash, on August 1.
Fears over the split, that some feared would lead to instability, now seem to be allayed, as indicated by the positive price moves since.
Nothing to fear but fear itself, apparently.
However, according to an article posted April 18 in the MIT Technology Review, there is a great deal more to fear:
[O]ne expert warns that they may be building their dreams on top of a precarious foundation. Emin Gün Sirer, an associate professor at Cornell University, has been researching ways in which Bitcoin and blockchains can fail.
“The Bitcoin client is about 30,000 lines of code,” Gün Sirer said Tuesday at Business of Blockchain, a conference organized by MIT Technology Review and the MIT Media Lab. “It’s amazing that we haven’t found as many mission-critical bugs as one would expect, and in fact that’s a testament to people who have worked behind the scenes on it.”
In May, an article in Investopedia pointed out:
Price fluctuations in the Bitcoin spot rate on the Bitcoin exchanges is driven by many factors. Volatility is measured in traditional markets by the Volatility Index, also known as the CBOE Volatility Index (VIX). Volatility in Bitcoin does not yet have a generally accepted index since cryptocurrency as an asset class is still in its nascent stages, but we do know that Bitcoin is capable of volatility in the form of 10x changes in price versus the U.S. dollar, in a relatively short period of time
Based on that assessment and past bitcoin trading patterns, the value of the currency could drop from $4,000 to $3,000 quickly.