Bitcoin continued its astonishing run overnight and blasted past US$19,000 during an incredibly eventful night of trade.
According to the Financial Times, during the space of just 20 minutes, the Bitcoin price on the Coinbase exchange jumped to a high of US$19,340 before falling down to US$15,000. Demonstrating once again just how volatile the cryptocurrency can be.
At the time of writing Bitcoin is fetching US$16,875 according to Coinbase.
What is happening?
Investors continue to pile into Bitcoin ahead of the launch of futures contracts by CBOE at the weekend in the United States.
These contracts are being seen as a big step forward for Bitcoin in legitimising its use, bringing it to the mainstream, and providing a more secure and accessible way to trade it.
It may also help solve a major issue that occurred overnight. Due to the incredible demand and wild swings in its price, prices for Bitcoin diverged significantly on its biggest exchanges, exposing its fragile trading infrastructure.
At one stage the difference in pricing on other exchanges was as much as US$4,000 for the same Bitcoin asset.
What next?
I don't believe its run higher is done, but I wouldn't bet the house on it being the case. Rather, I would bet only a very small part of my portfolio on this and recommend that investors wanting to gain exposure to Bitcoin do similar. I would suggest no more than 1% of an overall portfolio due to the risks and volatility.
