As the year draws to a close, not only is the US stock market approaching record highs, but a touted alternative to the existing financial system is also booming.
Bitcoin is now trading over $29,000 per single coin, up more than 24% in the last seven days alone. It’s blown past its previous high of $20,000 and is likely to top the $30,000 mark by the end of the weekend if it keeps trending in its current direction.
Bitcoin is a digital currency that is created by “mining” a blockchain, which rewards users who solve complex equations. Although some liken it to the tulip craze and other speculative investments, it has attracted numerous world class investors and financial institutions, particularly in the last six months.
Only 21 million Bitcoin will ever exist in the complex system, making it a finite resource.
The Bitcoin boom is a tide that is lifting other boats. Such alt-coins as ethereum’s Ether (now at $745), and Litecoin ($135) are also at or near record levels, boosting the overall markets. Other coins are also on the rise, making for a red-hot market heading into 2021.
The only down note is found in the third-largest digital currency by market capitalization. The Securities and Exchange Commission has sued Ripple Labs, the company that issues XRP. The complaint charges XRP’s backers with conducting an unlawful issuance of securities and personally profiting from the endeavor. As a result, the price has crashed and many crypto exchanges have stopped trading in it.
But overall, a robust cryptocurrency market means good things for new entertainment start-ups, as investors that are flush with extra cash as their cryptos rise are more likely to back disruptive new companies.