Bitcoin soars to all-time high despite claims of a bubble

Richard Branson CEO of Virgin Galactic which accepts bitcoin as a form of payment

Richard Branson CEO of Virgin Galactic which accepts bitcoin as a form of payment

One bitcoin is now valued at $5,161 as of 0822 GMT.

That said, Goldman Sachs is reportedly considering offering bitcoin trading and even China is considering easing restrictions of the cryptocurrency.

It has been a volatile journey, with the cryptocurrency sliding down to under $3,000 last month when Chinese authorities announced a ban on trading the currency.

This week, Russian Federation has announced the regulation of digital currencies, as President Vladimir Putin said the instrument has significant financial risks.

Though there have been many warnings about a bitcoin "bubble", including from European Central Bank Deputy Governor Vitor Constancio, some say it has much further to climb. While the week-to-week growth is 18.75%, the month-to-month increase is around 23 percent.

Two weeks ago, Japan's government implemented rules that recognize bitcoin as a payment method.

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Neil Wilson, senior market analyst at ETX Capital, said investors in bitcoin are also buoyed by news that U.S. banking giant Goldman Sachs plans to trade the cryptocurrency. In the past, JP Morgan CEO, Jamie Dimon, had labeled Bitcoin a fraud that would end up blowing up.

The price of Bitcoin reached an all-time high, smashing through the $5,000 mark as it rebounds from a short period of uncertainty.

Professor of economics and public policy at Harvard University, Kenneth Rogoff, expects the price of Bitcoin to collapse.

"It is folly to think that bitcoin will ever be allowed to supplant central bank-issued money", he wrote in the Guardian this week. "But it is an entirely different matter for governments to allow large-scale anonymous payments, which would make it extremely hard to collect taxes or counter criminal activity".

"It is hard to argue that bitcoin does anything better than existing currency arrangements whilst it does some things to a lower standard", Murray added.

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