Cryptocurrency Bitcoin on Wednesday broke through the $20,000-mark for the first since it started trading. This was following a sustained increase in value over the last few weeks. The leading virtual currency was launched back in 2009.
Bitcoin reached an all-time high of $20,398.50 on Wednesday, however, it fell back to $20,145 later in the day. This was still an inter-day gain of nearly 4 per cent. In March, Bitcoin started a meteoric climb owing to online payments giant PayPal announcing that it will allow its account holders to use the cryptocurrency. The value of Bitcoin was around $5,000 in March and it has increased 400 per cent in the last eight months.
The US Federal Reserve and several other banks - including those in China and Sweden - are testing digital applications as a reaction to social media giant Facebook's recent move to start producing its own digital currency called Libra.
A number of other banks have also reacted to the rise of various cryptocurrencies across the world on one hand and the slump in the usage of cash on the other. Banks are announcing plans for bank-backed virtual units.
Bitcoin is not regulated by any central bank, hence it has emerged as a lucrative option for investors who have exotic interests. However, its under-the-radar nature has also attracted criminals.
Debate on whether Bitcoin should be seen as a form of money, an asset or a commodity has been raging on since the cryptocurrency was introduced in 2009. The virtual currency gained popularity in 2013 when it crossed $1,000 for the first time. Since then it has been increasingly attracting the attention of financial institutions and also experienced some crazy price jumps and slumps.
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