Citing Alistair Milne, co-founder and chief investment officer of the Altana Digital Currency Fund, CNBC reported that the huge jump was due to the CME getting into the cryptocurrency market. As the biggest bitcoin exchange in the U.S., Coinbase – which has 11.9 million users – has become a very popular way to purchase bitcoin and other cryptocurrencies.
CME’s entry into the market not only boosts credibility, but it also enables bigger investors – who are otherwise restricted from directly buying bitcoin – to ride the digital currency trend. At the start of the year, bitcoin was valued at around $1,000, but is now trading at a high of around $7,454.04 as of the end of the week, according to CoinDesk.
Earlier in the week, CME said it would launch bitcoin futures in the last quarter of this year. The group’s backing signaled that the digital currency is on its way to becoming a legitimate mainstream alternative currency, which has sent its value surging.
The increased value of cryptocurrency comes at a time when some on Wall Street are still refusing to buy into the so-called hype. JPMorgan CEO Jamie Dimon famously called bitcoin a “fraud” recently, and even said, “if you’re stupid enough to buy it, you’ll pay the price for it one day.” His comments have done little to impact the value of bitcoin, which has continually set record highs ever since.
CME’s entrance into the market, as well as support from others in the industry, is keeping investors interested in this alternative currency.