The high-altitude flight of the Bitcoin continues unabated. The digital currency reached a high of more than 7200 dollars on the important trading platform Bitstamp. Thus, the price has risen by about 70 percent since the beginning of October. The trigger for the recent price gain is an announcement by the world’s largest financial derivatives exchange, the CME in Chicago. It intends to start trading futures on bitcoins by the end of the year. Prerequisite for this was the approval of all competent authorities, it said in a statement.
The futures contracts on the crypto currency are scheduled to be settled in cash. For this purpose, the exchange operator determines once a day a reference value based on US dollars. This would make bitcoin trading interesting for large institutional investors.
Bankers point to risks
Bitcoin is the best-known of the many digital currencies that have emerged since the 2008 financial crisis. The idea behind it is independence from state control. This is to be achieved by not issuing central banks such as the European Central Bank (ECB) the currency, but it is privately organized in complex computerized computing processes.
The Bitcoin system uses the so-called blockchain technology. It is an encrypted database where all transactions are stored.
Recently, representatives of central banks referred to risks associated with the digital currency. Among other things, Ewald Nowotny, council member of the European Central Bank (ECB) said that within the central bank about solid legal restrictions had been discussed. The developments in digital currencies such as Bitcoin are dangerous and deeply suspicious. The need for better regulation was recently received from China. The head of the US bank JP Morgan, Jamie Dimon, had even called the currency a scam.
In addition to strong price fluctuations, critics also criticize security risks and anonymity in the payment process, which makes digital currencies attractive for illegal uses.