The exuberance surrounding the bitcoin is back. The digital currency soared to a new record high today, hitting $675 after trading in the $400s only yesterday. So how can you get in on the action if you want to invest in this highly volatile currency? Jordan Wathen of The Motley Fool say for U.S. investors, it’s as easy as opening up an account with Coinbase.
Coinbase makes it easy to buy bitcoins
Coinbase is a startup company which is easing the process for U.S. investors to purchase bitcoins. It is quickly becoming the most well-known U.S. exchange for the digital currency. After verifying your identity and bank account, you are then able to purchase up to ten bitcoins per day through the site.
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Over the last few days, Coinbase rolled out a new feature allowing users to set up automatic purchases of bitcoins every week. After 30 days have passed (because of regulatory requirements), members are then allowed to buy up to 50 bitcoins per day if they wish to do so. Coinbase charges a 1% fee for purchasing bitcoins through its site.
Coinbase and Mt. Gox
Mt. Gox has gotten most of the attention since it was previously the world’s biggest bitcoin exchange. However, it was surpassed by China’s exchange as demand there pushed the currency’s value higher and higher. If Coinbase plays its cards right, it could surpass Mt. Gox in popularity in the U.S.
Wathen notes that Coinbase shows the most promise among the new bitcoin exchanges which are popping up since the same early investors which invested in Twitter Inc (NYSE:TWTR) also invested in Coinbase.
What is a bitcoin worth?
As bitcoin values balloon upward day by day, there’s much debate about just how much the digital currency is worth. It’s important to note that the value of the bitcoin depends on which exchange you are looking at. Coinbase lists the value as around $610 at the time of this writing, although Mt. Gox had it listed at around $670. So there’s a meaningful difference there.
The Winklevoss twins believe it is worth almost $40,000. If they’re right, then those getting in on the currency now are in for a major windfall in the future. However, we’ve seen this year just how volatile the bitcoin is right now. Worries earlier this year sent the currency’s value plunging, so there’s always the risk that it could happen again and not recover. But as regulators consider what bitcoins could be used for, bulls will speculate that only good times are ahead for the digital currency.