Bitcoin races past US$17,000

The Bitcoin price has raced past US$17,000. Is it on its way to US$20,000?

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Despite outages at some leading Bitcoin exchanges and being called a “speculative mania” by the Reserve Bank, the Bitcoin price has continued its impressive run and climbed higher during trade on Wednesday.

At the time of writing the Bitcoin price is fetching US$17,329.36 according to CoinDesk.

What’s been happening?

According to the Financial Times, the Bitfinex exchange went offline overnight after being subjected to denial of service attacks. Elsewhere, the Coinbase exchange appears to have buckled due to the sheer demand by new users eager to gain exposure to the crytocurrency.

Which shouldn’t come as a surprise. At the start of the year the Bitcoin price was around US$1,000, whereas now it is 1,600% higher.

This means that a $10,000 investment in Bitcoin at the start of the year would be worth $170,000 today.

Unfortunately, I think it is very unlikely that we will see Bitcoin deliver returns like that again any time soon. So investors might want to consider shares with exposure to cryptocurrencies instead.

Two shares that jump out to me are Digitalx Ltd (ASX: DCC) and Change Financial Ltd (ASX: CCA).

As I said yesterday, I think DigitalX is a promising company but I’m not ready to invest in it just yet on valuation grounds.

Whereas Change Financial could be a great long-term buy and hold investment due to its strong core business and exposure to cryptocurrencies through its 33% stake in Ivy Koin.

Ivy Koin is developing a blockchain-based solution to one of the biggest problems preventing mainstream adoption of cryptocurrencies by banks. Its business-class coin has been designed for business transactions over $10,000 and comes with the ability to turn on or off a transparency layer that satisfies banking partners.

Furthermore, it embeds significantly more information into cryptocurrency payments than is currently transmitted via the SWIFT network, potentially opening up cryptocurrency banking to more banking institutions and professional business merchants.

While it is early days and there’s a long road ahead, I do think it makes this mobile banking company even more attractive and one to watch in 2018.

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Motley Fool contributor James Mickleboro owns shares of ChimpChange Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. 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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