New York, Dec 7 (AP) The price of bitcoin swung wildlytoday, rising to more than USD 19,000 only to fall sharplywithin minutes, as the frenzy surrounding the virtual currencyescalated just days before it starts trading on a major USexchange.
The frenzy even has parts of Wall Street concerned. Agroup of banks came out and complained that federal regulatorsapproved bitcoin futures, which begin trading on Sunday, tooquickly and without properly considering the inherent risks inthe virtual currency.
At 1:05 p.m. EST, Bitcoin was valued at USD 16,825,according to Coinbase, after briefly surging above USD 19,000this morning.
At the start of the year, one bitcoin was worth less thanUSD 1,000.
Coinbase, the largest bitcoin exchange, at one pointtweeted that record-high traffic had caused interruptions toits service.
The swings in price occurred just as the tradingcommunity prepares for bitcoin to start trading on twoestablished U.S. exchanges. Futures for bitcoin will starttrading on the Chicago Board Options Exchange on Sundayevening and on the Chicago Mercantile Exchange a week later.
The Futures Industry Association, which represents WallStreet's biggest banks and clearing houses, sent a letter tothe Commodities Futures Trading Commission, saying that as theguarantors of customers trades, they should have beenconsulted before trading in bitcoin futures was approved.
They expressed concern that the extreme volatility tiedinto bitcoin could leave banks exposed when the futures movetoo violently.
Bitcoin is the world's most popular virtual currency.
Such currencies are not tied to a bank or government and allowusers to spend money anonymously. They are basically lines ofcomputer code that are digitally signed each time they aretraded.
A debate is raging on the merits of such currencies. Somesay they serve merely to facilitate money laundering andillicit, anonymous payments. Others say they can be helpfulmethods of payment, such as in crisis situations wherenational currencies have collapsed.
Miners of bitcoins and other virtual currencies help keepthe systems honest by having their computers keep a globalrunning tally of transactions. That prevents cheaters fromspending the same digital coin twice.
Online security is a vital concern for such dealings.
In Japan, following the failure of a bitcoin exchange calledMt. Gox, new laws were enacted to regulate bitcoin and othervirtual currencies. Mt. Gox shut down in February 2014, sayingit lost about 850,000 bitcoins, possibly to hackers. (AP)NSA.
This is unedited, unformatted feed from the Press Trust of India wire.