Bitcoin just rocketed past US$14,000

Just 24 hours ago I wrote about how the Bitcoin price was on the verge of breaking through the US$12,000 mark.

Well, fast forward to today and the cryptocurrency has continued its incredible run and just broke through the US$14,000 level.

A short time ago the Bitcoin price was fetching US$14,097 according to CoinDesk.

With 16,725,200 Bitcoins in circulation, this gives it a market capitalisation of almost US$236 billion or A$312 billion.

By comparison, that’s just a touch lower than the combined value of Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd. (ASX: NAB), and Westpac Banking Corp (ASX: WBC).

Why is it going gangbusters?

Despite more and more market commentators warning that Bitcoin is a bubble that is on the verge of bursting, traders and speculators continue to fight to get hold of the cryptocurrency ahead of the launch of CBOE Bitcoin futures in the United States on Sunday.

The launch of Bitcoin futures is being seen as a major positive for the cryptocurrency and the first step in the path to mainstream adoption.

While I agree that it will make it an easier and secure way for retail investors to buy and sell Bitcoin, I don’t think it will make it any less risky.

And although I feel it could still go a lot higher from here, there is a danger of a sharp profit-taking pull-back after its impressive gain.

For this reason I would suggest that any investors looking to buy Bitcoin futures do so with caution and limit an investment to just a small portion of their overall portfolio.

If you feel like you've missed out on the Bitcoin boom, then you won't want to miss out on this next boom which could be even bigger.

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And when Bill Gates speaks, it pays to listen.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of National Australia Bank Limited. 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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