Bitcoins Soar Past $1,000 For The First Time

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Another new record high for bitcoins today. On Japanese bitcoin exchange Mt. Gox, they soared past the $1,000 mark today for the very first time. As of this writing, the new high on Mt. Gox was $1,044, while the day’s low was $877, so clearly volatility in the currency remains. But for how long?

Coinbase closing gap with Mt. Gox

Although Mt. Gox remains the measuring stick by which most people see how much bitcoins cost, I have been keeping an eye on U.S.-based bitcoin exchange and digital wallet company Coinbase as well. I’ve noticed that the value of the digital currency there has been meaningfully lower than it has been on Mt. Gox. However, that gap is starting to close.

As of this writing, Coinbase showed bitcoins as being listed for $982.

China loves bitcoins, regulators might too

One of the reasons bitcoins have soared in value recently has been the increase in popularity in China. China’s bitcoin exchange surpassed Mt. Gox as the world’s biggest bitcoin exchange not too long ago.

Another reason is because regulators are starting to pay attention to the digital currency. The U.S. Senate spent two days talking about them, and Fed Chairman Ben Bernanke sent out a statement suggesting that bitcoins could have “long term promise.” According to Rob Wile of Business Insider, his comment was more in reference to an innovation in payment processing. In fact, most of the regulators who have commented on bitcoins were also focusing on payment processing rather than as an actual currency.

Are bitcoins a safe bet?

As the value of bitcoins surges, many investors want to know if it’s a good idea to sink some money into them. A bitcoin hedge fund is actually the best-performing hedge fund so far this year, posting a 4,847% return after bitcoins exploded, recording more than 6,000% growth against the U.S. dollar so far. And the Winklevoss twins think bitcoins are worth millions of dollars apiece.

Ben Rooney of CNN Money reports that most investors, however, see bitcoins as a speculative investment at best and recommend putting no more than 1% of your portfolio into the digital currency. Some even compare it to a lottery ticket, suggesting that it might be worth a lot or nothing at all.

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