Bitcoin Reaches Record Value Of £224

Bitcoin (BTC), the virtual currency based on an open source peer-to-peer protocol, has reached a new record value, trading as high as $324 (£200) on Mt Gox exchange on Thursday afternoon.

The previous record was set in April 2013, when BTC would cost around $267, and just a month ago, the price of one Bitcoin was hovering around $140.

The exact causes for the sudden jump in value are not clear. Some experts have linked it to the closure of the Silk Road, an illegal online marketplace, while others have suggested that the price was going up since more businesses are accepting payments in Bitcoin than ever before.

Critics say the virtual currency has created an economic bubble, which will inevitably burst, with the price of Bitcoin price experiencing 2,000 percent growth since the beginning of the year. Last month, a Norwegian citizen had made the headlines thanks to a 150 kroner (£16) investment in Bitcoin that years later bought him a flat in central Oslo.

Bitcoin Instability

At the beginning of October, US authorities arrested Ross William Ulbricht, a US citizen who allegedly ran the Silk Road – an infamous ‘Dark Web’ marketplace that conducted most transactions in Bitcoin. Before it was shut down, the website used to sell everything from drugs and weapons to malware, forged documents and stolen credit card details.

But instead of damaging the digital currency, Silk Road closure only caused a temporary 10 percent dip in Bitcoin price, with experts predicting at the time that the arrest would actually increase confidence in the virtual currency.

On October 14, Baidu, China’s largest search engine, announced it would start accepting Bitcoin as a method of payment for some online security services, with many expecting more Chinese investment into the currency. According to ConvergEx Group, BTC China is currently the world’s largest Bitcoin exchange.

These factors could have contributed to the price of Bitcoin growing steadily through October, gaining about $90 in value in the last seven days.

Another explanation for the record high is Bitcoin being at the centre of a speculative bubble, with investors buying the currency in hopes its value will continue increasing, pushing the price up even further in the process.

Meanwhile, a successor to the Silk Road has launched earlier this week, openly mocking the FBI and promising better security for sellers.

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