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Bitcoin closes in on US$12,000

It wasn’t that long ago that we were talking about the Bitcoin price finally breaking through the US$10,000 mark and here we are today with the cryptocurrency on the verge of US$12,000.

Overnight Bitcoin rose as high as US$11,859 before giving back some of its gains.

At the time of writing the Bitcoin price has risen to US$11,725, according to CoinDesk.

This gives it a market cap of US$196 billion, which is more than the GDP of New Zealand.

Why is it continuing to climb higher?

As well as traders and speculators looking to get rich from it, the cryptocurrency has been given a boost by the planned launch of two Bitcoin futures contracts this month by CBOE and CME.

Bitcoin futures will be available through CBOE as soon as December 10, giving retail investors easier and more secure access to the increasingly popular cryptocurrency.

However, it is worth remembering that this does not make it any less risky for investors. The Bitcoin price has a habit of swinging wildly in both directions.

Should you invest?

While I do expect Bitcoin to rise over the next 12 months, I would limit any investment to just a very small portion of a diverse portfolio. I certainly wouldn’t be betting the house on it.

Investors with a lower tolerance for risk might want to consider some of the more exciting blue-chip tech shares on the local market such as Aconex Ltd (ASX: ACX) and Altium Limited (ASX: ALU) instead.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of ACONEX FPO and Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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