Bitcoin, the virtual currency founded in 2009, had a mountainous rise that began in 2013, in which the price of a Bitcoin started the year around $10 only to rally to its all time high of $1200 later that year. Programmers (“miners”) and traders flocked to the new asset as it continued its bullish charge.
After a lousy 2014 performance, which saw prices fall from roughly $1000 to sub-$300, Bitcoin is once again staging an impressive rally today, once up as high as 20%. Bitcoin opened today at $254.70 and reached a high of $309.90 on the day, but currently trades at $279.90.
Bitcoin’s First Licensed Exchange in US Launched Today
A major factor behind the impressive rally is the fact that Coinbase Inc. launched the first official licensed Bitcoin exchange in the US called Lunar. The new US-based exchange gives Bitcoin and its backers a sigh of relief as Lunar gives consumers a boost in confidence and legitimacy.
Coinbase was able to open the new exchange thanks to a $106 million investment from the New York Stock Exchange, BBVA (bank based in Spain), USAA bank, Japanese telecom company NTT DoCoMo, ex-CEO of Citigroup Vikram Pandit and others.
Bitcoin-backers Hope to Put Currency’s Rock Past Behind It After Lunar
Bitcoin certainly has had some extremely negative press in the past few years. The largest and most notable negative press came from the unexpected closure and bankruptcy of the Japanese exchange, Mt. Gox. Company executives found that roughly 744,000 Bitcoins totaling up to $350 million, at the time, was missing from Mt. Gox’s servers and had been stolen due to lack of security features to protect its customers’ holdings. The closure prompted a backlash from government entities around the world and Bitcoin began to see a fall from grace.
Just recently on January 5, 2015, Bitstamp, the second largest Bitcoin exchange, notified the public that it had temporarily shut down trading due to the fact that roughly 19,000 Bitcoins had been stolen. Totaling up to a value of $5.1 million as of the incident, the lost Bitcoins once again shuttered supporters and consumers, as they were dealt another loss.
While Bitcoin exchanges prior have struggled with security and keeping holdings safe from hackers, Coinbase’s US exchange will hopefully learn from the past failure of some of its peers. Additionally, US standards are certainly higher and stricter in order to protect consumers and traders from similar incidents. For instance, the New York State Department of Financial Services looks to standardize the process of approval for Bitcoins by implementing a “BitLicense”. Additionally, all Bitcoin exchanges must follow strict laws that pertain to other exchanges in the US. Overall, Bitcoin certainly has some rebranding to do, but placing a regulated exchange in the US is certainly a good start.