The record breaking surge in its price is continuing with the crypto currency bitcoin as this virtual currency surged past the $60,000 mark for the first time.
The recent surge in the value of bitcoin – which has risen by almost three times in value since the end of last year, has been primarily driven by greater investor confidence as a larger number of mainstream and well known companies have started to adopt the virtual currency as a legitimate method of transactions and payment for their goods and services.
However according to some analysts, this latest growth in the price of the crypto currency was more because of the huge Covid-19 stimulus package by the United States that was approved and passed earlier this week.
Last month the total market capitalization of bitcoin went past the $1 trillion mark.
However there can be no surety about the value of bitcoin because it has a long history of violent fluctuations in its prices and has dropped sharply after having risen for a number of times since it was first created and launched in 2009.
Investors of bitcoin got a boost last month after the announcement by the United States based electric car maker Tesla’s chief executive officer Elon Musk’s that his company had purchases bitcoin worth about $1.5 billion and the company would be accepting the virtual currency as a payment from customers for the sale of its cars in the future.
Other global companies have also given very positive signals of them adopting bitcoin as a mode of legitimate payment for their products and services. Plans of accepting the virtual currency as a form of payment was revealed in reports for Mastercard while there were reports of the possible ways in which the digital currency can be used by it was being explored by BlackRock, the largest asset managing company of the world.
According to analysts, the surge in the price of bitcoin has also partly been driven by the Covid-19 pandemic with more customers shifting to online sources for shopping and slowly but surely moving away from physical coins and notes.
However critics of the digital currency have argued that bitcoin should be considered less as a currency for transactions and more as a speculative trading tool which can be vulnerable to manipulation in the market.
On the other hand, environmentalists have also criticised the crypto currency for its role in accelerating climate change as the transactions in the digital currency is confirmed electronically through computer calculations over a blockhain which requires a lot of energy – which releases harmful carbon dioxide and other green house gases in the environment.
(Adapted form BBC.com)