The price of Bitcoin sailed past $11,000 this morning as it recovered 88 percent of losses from its previous February low, which lead traders to believe a bottom has been found in the cryptocurrency.
What is the value of Bitcoin today?
As of February 20, CoinDesk’s Bitcoin Price Index (BPI) highlights a peak up to $11,279.18 (£8,068.54) – the first time the currency has broken through the $11,000 mark since January 29.
Investors remain cautious after Bitcoin plunged to $5,947.40 (£4,254.18) at the beginning of the month on Feb 6, but hope remains that BTC has reached a stable bottom at $6,000 (£4,292.09).
Earlier fears that regulations over Bitcoin could stifle growth and apparent rumours over price manipulation seem to have subsided as investors hold steady over the weekend.
Will Bitcoin finally crash?
Bitcoin is not without its critics, as Governor of the Bank of England, Mark Carney, told students at Regent’s University, London.
Mr Carney rejected Bitcoin as a currency, saying it had “pretty much failed” in comparison to other currencies, with no real-world value to buy items.
He said: “It has pretty much failed thus far on… the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium exchange.”
The meteoric rise in cryptocurrency popularity took investors by surprise over 2017 and fears of a bursting bubble surround the boom.
Venezuela enters the crypto-race
Market stability could be attributed to the news this morning that the Venezuelan government has launched a new cryptocurrency called the petro.
President Nicolas Maduro praised the decision, hoping the move into cryptocurrency will help the country make financial transactions and get around western economic sanctions.
President Maduro said: “The difference with this crypto-currency is that the government says it is backed by one barrel of oil, so it’s a way for the Venezuelan government to say that this currency has some extra real-world value.
“Other sanctioned nations will be watching closely as Petro could set a precedent.
“In our view, if Petro goes ahead and the Venezuelan government manages to raise a considerable amount from investors, this could bring more international scrutiny from regulators.
“However, this will also enhance the power of cryptocurrencies’ decentralised component.
“If sovereignty is enhanced through cryptocurrencies, and regulators are unable to do anything about it, what more is there left to prove? Cryptocurrencies will be truly decentralised.”
While the news will please investors after the shock drop seen over February, Ethereum founder, Vitalik Buterin, was quick to temper expectations on Sunday, reminding traders that cryptocurrencies are “hyper-volatile” and could drop to near-zero value at any time.
Daniele Bianchi of Warwick Business School told Express.co.uk that just like an Initial Coin Offering (ICO), the Petro will be introduced through a pre-sale which will offer the new cryptocurrency at a discount.
He said: “In fact, rather than a cryptocurrency it is really an Ethereum-based token like many others we are seeing in the ICO eco-system.
“Clearly, the underlying logic of this ICO is to get around the financial sanctions imposed by the US and Europe.
“It represents the biggest ICO ever proposed, and if it hits its cap, around $5bn, that will represent about 5 percent of the entire total of Ethereum currently circulating and will almost equal the total revenue generated by ICOs in 2017.”