Bitcoin has shot up to an all-time high of $9,700 on Monday. This year’s rally has seen the cryptocurrency rise all the way from $1,000 in January.
Since the decision to launch the bitcoin futures in October 2016, the currency has gained over 50 percent in value.
Several central banks have advocated regulations to impose control of the currency, with warnings of a bubble.
“The legitimacy this gives bitcoin as a tradeable asset is very important. The market cap of bitcoin now exceeds that of IBM, Disney [or] McDonald’s,” said Neil Wilson, senior market analyst at ETX Capital.
Because Bitcoins are not centralized and only pass through blockchain, there are growing concerns about the currency’s vulnerability to hackers.
“For traditionalists, it’s hard to fathom. Rather than a commodity or currency, bitcoin is like owning stock in a company that will only ever issue 21m shares and never pay a penny in dividends,” added Wilson.
“The only way it has value is if the next guy is willing to pay you more for it – the greater fool. With no intrinsic value to bitcoin, it’s hard to see this as anything other than a giant speculative bubble.”
The Bitcoin has seen an impressive rally throughout 2017 – despite in mid-September when Chinese authorities announced a crackdown on the cryptocurrency.
Not all are optimistic about the future of the currency. JP Morgan (LON:JMC) chief executive, Jamie Dimon, said that it was bound to blow up before too long.
“For two reasons: it’s against our rules, and they’re stupid. And both are dangerous,” he said at a conference in New York.
“The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.
“If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than US dollars. So there may be a market for that, but it would be a limited market.”