Bitcoin prices topped $5,000 for the first time today, surpassing this key, psychological level and setting a fresh high.
The crypocurrency’s price had risen to as much as $5,005.26 at the time of report, according to the CoinDesk Bitcoin Price Index (BPI). This brought its year-to-date (YTD) return to almost 420%.[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Bitcoin’s price has pushed higher amid a variety of factors, including technological improvements, growing interest in cryptocurrencies and sustained inflows from investors.
Bitcoin recently implemented Segregated Witness, an upgrade that will increase transaction capacity and help relieve some of the pressure that rising adoption has placed on the network.
In November, the digital currency will undergo a hard fork that will further increase its capacity for processing transactions.
This hard fork could split the network into two separate blockchains, and this move would result in three versions of Bitcoin: the two new Bitcoin blockchains and Bitcoin Cash.
In spite of this uncertainty, the price of Bitcoin has marched higher.
A Growing Space
While this digital asset undergoes these technical upgrades, the broader cryptocurrency space has been generating significant visibility.
A growing number of organizations have been exploring the potential uses of these digital assets, and many companies have been holding initial coin offerings (ICOs), innovative token sales that organizations can use to raise funds.
As cryptocurrencies have become known to a rising number of people, they have continued to draw money from investors, causing their total market capitalization (market cap) to rise to all-new highs.
Today, this total market cap surpassed $179 billion for the first time, according to figures provided by CoinMarketCap. This measure of value has surged more than 900% this year, causing cryptocurrencies as a whole to outperform many other asset classes, including stocks and bonds.
This has been a strong year for Bitcoin, which has surged more than 400% in value and hit a series of all-time highs.
Will the world’s largest cryptocurrency by market capitalization be able to keep up this torrid growth?
The currency’s potential market is vast, as there are billions of people online.
In November 2016, The Washington Post reported that 47% – or nearly half – of the world’s population was using the internet.
If even a slim fraction of these people make use of Bitcoin, the digital currency’s price could skyrocket.
Disclosure: I own some Bitcoin and Ether.