Wild Week For Bitcoin

This week has been a rollercoaster ride for Bitcoin – and could signal an equally unpredictable future.
What happened this week?
The eight-year-old cryptocurrency has pulled in droves of investors in recent months. But this week it hit record-breaking highs, soaring over $10,000 (£7,493) in value. At the start of 2017 a Bitcoin was worth just $1,000.
And yet within 24 hours of hitting the benchmark it had climbed past $11,000 before losing nearly 20% of its value, to just barely $9,000.
This rollercoaster ride, and resulting headlines, prompted the Bank of England to warn “investors should do their homework” on Bitcoin: some say the currency is peaking and based on nothing but a speculative bubble, while others feel it could have further to rise.
“This week is no different,” says David Yermack, professor of finance and business transformation at New York University. “Bitcoin has always been very volatile. Anybody who invests should have a large amount of risk tolerance.”

Government intervention?
While some think Bitcoin is the future of money, others think that the party will inevitably screech to an halt once governments get serious about trying to regulate it.
Right now? “It’s a total mess,” says Tadge Dryja, research scientist at MIT’s Digital Currency Initiative, when describing the decentralised nature of Bitcoin – meaning, there is no central body like a government or bank that oversees its distribution or use.
Dryja and his team are working on systems that will make Bitcoin safer and easier for Bitcoin holders to use in the future. But as it stands he describes the digital currency as “dangerous.”
“I guess the best analogy is that of gold: governments can regulate the institutions that deal with it but not the metal itself. They can’t decide if it’s going to weigh less or be purple instead of yellow. They will have to regulate what is regulate-able.”
That’s why some think eventual regulation will burst the bubble.
Kenneth Rogoff is a professor of public policy and economics at Harvard University and former chief economist at the International Monetary Fund. He thinks that there could be a broad international crackdown, and that even in countries like Japan or Australia which have gone to great lengths to legalise bitcoin, it won’t be further legitimised because governments cannot allow people to make big transactions in ways that can’t be traced