When bitcoin prices gain about 10% on a single trading day, as they did during both Wednesday’s and Thursday’s sessions, the corresponding price increase is now more than $1,000. In one day! (However, prices then fell by more than $2,000 overnight on Friday.) The cryptocurrency sensation has clearly reached a fever pitch.
For those unacquainted, bitcoin is the oldest, most popular, and most trusted among the variety of cryptocurrencies (or altcoins) that now exist. Its dramatic price swings are earning it increasing attention from Wall St, and certainly from speculators.
Bitcoin is often abbreviated BTC, as if it were a security, but it’s not a share of equity or a bond. It lacks some of the fundamental properties of a currency, so it’s not that either. (Anything whose price can change $1,000 in a day doesn’t make for a useful unit of account.) Financial regulators, in fact, have had a hard time classifying it altogether the past few years. It seems strange to label something intangible a commodity, but that’s the categorization that some have been settled on.
The price of bitcoin has nonetheless increased roughly 1,000x—that’s a thousandfold, or more than 100,000%—over the past five years, rising from about $15 to over $15,000 in that span. It began the 2017 calendar year at $1,000; that means it’s up more than 1,000% year-to-date.
But the question so many people still have is, What is it?