The whole world is waiting with baited breath to see if and when bitcoin surpasses its next milestone: $10,000—it was trading $9,950 as of Tuesday. It almost seems inevitable at this point, after the digital currency smashed through a stream of other milestones this year, each one falling faster than the last. [Update: Another one bites the dust: Bitcoin was trading as high as $11,500 as of Wednesday morning.]
Only a week ago, bitcoin crossed $8,000 for the first time; a month ago, it crossed $6,000 for the first time; a little over three months ago, it crossed $4,000 for the first time; and six months ago, it crossed $2,000 for the first time.
Now with a market cap of $163 billion, bitcoin has risen tenfold so far this year, and perhaps more impressively, has introduced itself to tens of millions of people across the world, many of who never knew such a thing existed until recently.
People from all backgrounds are scrambling to get a piece of the action. The digital assets broker Coinbase now has an estimated 13.3 million accounts, up 300,000 in just a week, and more than 11.7 million active accounts on traditional brokerage Charles Schwab, according to CNBC.
Bubble, Or The Real Deal?
The dizzying speed with which bitcoin has ascended has many throwing around the "b" word―bubble. A columnist at BloombergGadfly commented that the bitcoin bubble "makes dot-com look rational." Bitcoin is now four times as expensive as dot-com stocks were at their height, Stephen Gandel wrote.
Hedge fund manager Ken Griffin of Citadel shares that view. He said earlier this week that bitcoin "has many of the elements of the tulip bulb mania we saw hundreds of years ago in Holland."
Yet at the same time that some call bitcoin a bubble, other investors and analysts are saying it's the real deal. Fundstrat's Tom Lee likens the cryptocurrency to gold, and forecasts that prices could hit $25,000 in the next five years.
Spencer Bogart, head of research at Blockchain Capital, says the bitcoin run is still in "the first inning," and that it will go much higher.
"Things like Square Cash adding bitcoin support are big. The biggest barrier to bitcoin adoption is that most people don’t want to go through the process of setting up an account on Coinbase. If people have the ability to purchase bitcoin from platforms they’re already on, it’s massively bullish for bitcoin," he said.
"I think we’ll see more mainstream financial services companies and fintech companies add bitcoin support over the next six months. Doing so can meaningfully contribute to top and bottom line," Bogart added.