Forget $10,000, bitcoin is now creeping towards $11,000

Bitcoin's value has increased tenfold this year after it smashed through the $10,000 barrier on major exchanges today, but the rise has not stopped there.

The cryptocurrency has charged ahead towards $11,000, trading up 9.41 per cent at $10,840.51 at the time of writing, according to Coindesk's aggregate index.

The notoriously volatile digital currency crashed to below $6,000 just this month. Its critics have labelled it a bubble, and many investors are still too wary to invest.

However, announcements like CME's decision to launch bitcoin futures by the end of the year are raising awareness by bringing the fringe asset into the mainstream.

Bitcoin bull and UK managing director at eToro, Iqbal Gandham, said the new milestone was driven by confidence that bitcoin will become a commonly used currency.

"Everyone from central banks, hedge funds, governments, big incumbent financial institutions and retailers are looking at use cases for cryptocurrencies. This trend isn’t going to slow down any time soon," he said.

While he admitted bitcoin is "going through its volatile teenage years", he denied it was a bubble.

“The reality is that emerging technologies carrying radically new ideas will always see swings in their value before their potential is fully realised and the price stabilises. The difference here is that the technology in question – the blockchain – means all this volatility happens in public," Gandham said.

Naeem Aslam, chief market analyst at Think Markets UK predicted bitcoin prices could reach $14,000 by the end of next year, if not by mid-year.

Aslam added: "Of course, the question everyone is asking is if and when there will be a pullback. The 10K mark does have the potential where we see some investors choosing to cash in some of their profit for the year.

"Setting investors aside, gains and moves like these keep central bankers awake, as bitcoin poses a clear threat for central banks who control and regulate currencies. The function of the central bank is to maintain price stability and keep inflation in check. Without central banks, price stability and inflation does become an issue and this would be something which needs to addressed."

Read more: Bitcoin breaks key $10,000 mark on some exchanges

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