Mere hours after hitting the $10,000 milestone, bitcoin surged past $11,000 early Wednesday, taking this year’s price surge to almost 12-fold despite warnings that the digital currency is in a bubble.
By 9:16am ET, bitcoin jumped to $11,377.33 according to CoinDesk. Just over an hour later, bitcoin was trading below $11,000 as the new milestone brought with it incredible volatility.
The euphoria around the largest cryptocurrency has brought it into the mainstream, attracting the individual and institutional alike. And while the actual volume of transactions conducted in digital currencies is still relatively small, the optimism surrounding blockchain technology continues to drive these currencies to new highs.
There are now more than 100 hedge funds dedicated to digital currencies, in a sign that some on Wall Street have embraced cryptocurrencies including bitcoin. However, vocal critics remain including Jamie Dimon, and Vanguard’s Jack Bogle who said on Tuesday that bitcoin should be avoided “like the plague.”
Mike Novogratz, one of the biggest bitcoin bulls on Wall Street and founder of a new $500 million fund to invest in cryptocurrencies, acknowledges that bitcoin is in a bubble. “This is a bubble and there is a lot of froth. This is going to be the biggest bubble of our lifetimes,” Novogratz said at a cryptocurrency conference on Tuesday in New York. He added, however that, “Bubbles start around ideas that are often right.”