It took nearly five years for the price of bitcoin to finally cross the first $1,000 mark. Comparatively, the next $1,000 increase was a relatively swift three-and-a-half year journey. In the past few months, though, bitcoin has broken through $1,000 thresholds every few weeks. In the past few days, it has taken mere hours.
Overnight, the price of bitcoin briefly climbed above $17,000, just eight hours after it first reached $16,000.
Some of the surge is explained by basic math: Going from $10 to $1,000 is a 9,900% increase, but the latest jump from $16,000 to $17,000 is only a 6% price increase.
And, of course, these are just symbolic price barriers and don’t imply that these gains will keep up. This is clear from the cryptocurrency’s extreme volatility. Already today, the bitcoin price has climbed 2% from the open but also dropped by as much as 14%. At the time of writing the price was back down to around $15,000, a fall of 10% on the day, according to CoinDesk.
As bitcoin soars higher and new users jump into the market, the larger exchanges where the cryptocurrency is traded are coming under strain. The platforms are reporting outages and other issues more frequently. The prices quoted on different exchanges can be thousands of dollars apart. Meanwhile, suspicions have been raised about “tether”, the digital tokens that allow people to cash in and out of bitcoin quickly, which are supposedly backed by US dollar deposits.
All this is happening as major derivatives exchanges in Chicago prepare to open up bitcoin trading to Wall Street bigwigs via futures (which allow traders to speculate on the future price of the cryptocurrency) this weekend, and Goldman Sachs said it is preparing to facilitate trades for some of its well-heeled clients.