Bitcoin Soars to Over $1,000

By Sunaina Rajani @SunainaRaj

Nov 27, 2013 5:29pm

GTY bitcoin physical sk 131127 16x9 608 Bitcoin Soars to Over $1,000

The digital currency Bitcoin topped $1,000 today for the first time on the Mt. Gox exchange in a 10 percent surge.

During this cybergold rush, what used to be a penny stock has shot up 7,733 percent from January 1 when it was valued $13.50.

Think of Bitcoin as a virtual credit card account that is anonymous and holds virtual moneyof one unit of currency. No one knows who owns this virtual form of payment because the identity is marked by a private key.

Read More: What Are Bitcoins? Virtual Currency Explained

This currency is not regulated or governed by any central bank. On Nov. 18, US officials at hearings on Capitol Hill said they were generally not opposed to Bitcoin payments, touching off an upward surge in the currency.

In recent weeks a number of vendors have started accepting Bitcoins. This includes OKCupid, Reddit, Cypriot University, New York City restaurant  Meze Grill and a Plastic Surgery clinic in Miami.

Read More: Cypriot University to Accept Bitcoin Payments

The backers of the currency say there will be a “Bitcoin Friday” on Nov. 29 for the Bitcoin community. There are going to be exclusive deals for Bitcoin users. These include airline tickets from Cheapair.com, FIFA games, booze, and Sriracha Bacon Lollipops.

Investors should be cautious, however, because there is no Federal Reserve for bitcoin. This means that if anything happens to your accounts, there will be no one to give you your money back. And there’s nothing of value backing Bitcoins, which are mined by computers running complicated algorithms though there is a maximum number of Bitcoins that can be “mined.”

One Bitcoin is currently valued at $1,044 on the Tokyo-based Mt. Gox Bitcoin exchange. They were just $500 a week ago, leading some observers to caution about a speculative bubble.

“I’m probably even less interested in it now,” Phil Christenson, an adviser and portfolio manager at Phillip James Financial, told Investmentnews.com. “Because it hit that $1,000 mark, [investors] think it’s going to go to $2,000, going to go to $5,000. This is probably the time to ignore it.”

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