Bitcoin smashes past $7,000
for the first time
- Bitcoin soared past the $7,000 mark for the first time Thursday
- The virtual currency reached an all-time high of $7,355.35 at about 7:16 a.m. ET
- CME Group said it would introduce bitcoin futures contracts Tuesday
Bitcoin soars past $7,000 to a new record high
The cryptocurrency has had a bullish streak throughout the week following the CME's announcement that it will introduce bitcoin futures contracts. According to data from CoinDesk, the virtual currency reached an all-time high of $7,355.35 at about 7:16 a.m. ET. The jump in price saw the virtual coin rise by more than 7 percent on the day. A surge in the digital coin's value saw the total market value of all cryptocurrencies top $189 billion for the first time Thursday. The market cap of bitcoin alone is currently more than $121 billion, according to data from industry website Coinmarketcap.
CME bitcoin futures
On Tuesday, the CME Group, the world's largest derivatives operator, said it would introduce bitcoin futures contracts. The introduction of such a product could bring more institutional investors into the market. Analysts believe this has been boosting the price. CME said its bitcoin futures contract would be cash-settled and based on the CME CF Bitcoin Reference Rate (BRR), launched in November last year with London-based online trading platform Crypto Facilities.
"This is bitcoin crossing the divide from the wild west of finance to the mainstream," Charles Hayter, CEO of cryptocurrency comparison website Crypto Compare, told CNBC in an email Thursday. "Futures from an incumbent exchange bring bitcoin and cryptocurrencies into the regulatory fold. This allows more complex financial products to be created and will eventually open the doors to institutional money." The digital currency's price has risen 600 percent since the beginning of the year.
A number of regulators have warned of illicit activity surrounding cryptocurrencies like bitcoin. In September, China banned a practice known as "initial coin offerings" (ICOs). An ICO is a crowdfunding method for firms to raise funds by selling new cryptocurrencies. China's regulators also moved to close down domestic bitcoin exchanges later that month. Both measures sent the price of bitcoin down sharply.
And on Wednesday, the U.S. Securities and Exchange Commission said that celebrity endorsements of ICOs could be "unlawful" if they do not disclose how they are benefiting. Banking executives like JPMorgan CEO Jamie Dimon and Blackrock CEO Larry Fink have also criticized the cryptocurrency. Dimon has made several comments on bitcoin, and last month said that investors "stupid enough to buy bitcoin" would "pay the price for it one day." Fink called the virtual currency an "index of money laundering" that same day, raising concerns over fraudulent activity.