Bitcoin Surges Past $11,000

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Bitcoin continues its surge that is now on the cusp of historic proportions. In just a few hours after it crossed the $10,000 barrier, it was already barreling past $11,000. Bitcoin has surged more than 12 fold this year alone. No matter how analysts discuss its bubble-like performance, it continues its meteoric rise and its total market value now exceeds $330 billion.

Analysts have long maintained that Bitcoin is hopelessly overvalued and prone to a major correction in price. These predictions were made at $3,000, $5,000 and now $10,000. Analysts and managers like Mike Novogratz have even gone on record as saying “this (Bitcoin) is going to be the biggest bubble of our lifetime.”

Naysayers have made it clear that they feel that Bitcoin values are unjustified, but supporters have clamored just as loudly that Bitcoin represents a new technology for finance in general and the values are justified as business moves into the blockchain. Blockchain technology offers a revolutionary way to keep track of financial transactions in a more open and transparent way.

Other supporters point to political events as a reason why people are embracing Bitcoin over fiat money that they feel is manipulated by governments. Peter Rosenstreich, head of Market Strategy at SwssQuote Bank SA put it bluntly. “There is growing unease on how central banks and governments are managing fiat currencies. Ordinary people globally understand why a decentralized asset is the ultimate safe haven.”

The euphoria surrounding the rise in Bitcoin has even made it to the Senate confirmation hearings for Fed Chairman nominee Jerome Powell. He was quoted as saying that Bitcoin is something that the Fed will certainly keep on an eye on when evaluating monetary policy in the future.

Nevertheless, Wall Street hedge funds operators have begun piling into Bitcoin over the last several months. In fact, Novogratz is forming a $500 million fund to invest in Bitcoin. He joins other Wall Street managers in embracing what they see as the future of financial technology.

The CME Group has announced that they will begin offering a futures contract for Bitcoin. This futures contract could begin trading as early as December. The largest US bank, JPMorgan & Chase Co., has begun initial discussions on offering Bitcoin future contracts for its customers as a way to hedge their holdings.

With the current run-up showing no signs of correction, it’s anybody’s guess where Bitcoin is headed to. Nevertheless, Bitcoin has shown its remarkable resilience to keep increasing and leading analysts are betting on this to continue.

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