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Bitcoin closing in on $10,000 - ANZ

Bitcoin rose over 15% through the weekend, closing in on $10,000 (+900% y/y) and the market cap of all crypto-currencies has topped USD300bn, compared to USD18bn at the start of the year, notes the research team at ANZ.

Key Quotes

“That’s a massive lift. But it’s chicken feed in a macro sense, meaning a sharp fall in the cryptocurrency poses few systemic risks. There’s also been interest in whether crypto-currencies will take over from regular money any time soon. The Reserve Bank released an analytic note this month that concludes that crypto-currencies currently fail most of the basic tests of useful ‘money’: as a broadly accepted medium of exchange, as a store of value (too volatile), or as a medium for the extension of credit (because of its pseudo anonymity).”

“The underlying blockchain technology is highly promising but is running into problems in that the size of the ‘ledger’ information that needs to be transmitted and reconciled grows with every transaction. This means Bitcoin is taking a heavy toll not only on computing power but also on good oldfashioned electrical power as trading volumes explode. “Mining” (creating by reconciling) Bitcoin is using more electricity than Ireland, and rising.”

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