Bitcoin hits new record of $50,000

Cryptocurrency Bitcoin has hit a new record after its value crossed 50,000 dollars on Wednesday.

The cryptocurrency was created by an unknown investor, and its values has risen about 72% this year.

Bitcoin and other cryptocurrencies are generated by computers. Part of its supposed value comes from the finite number that can be computed.

However, regulators and investors have warned about its high volatility. The values of cryptocurrencies can change fast, both upwards and downwards.

Business magnate Elon Musk, the founder of Tesla and SpaceX, has bought Bitcoin worth $1.5 billion. He has said that he would accept them as payment for its cars.

There is a strong opinion among cryptocurrency supporters that Bitcoin will replace gold in the future, as amid the COVID-19 pandemic, it was the top performing asset in 2020.

However, there is an opposite view…

“If that narrative comes to fruition, then the growth potential is off the charts as $50,000 per bitcoin equates to a market cap of roughly $931bn, which is almost 9% of gold,” said John Wu, president of blockchain company Ava Labs.

“If BTC meets gold’s market cap, then that would be at least $500,000 per bitcoin.”

Unlike other commodities, Bitcoin, however, cannot be used for anything else, merely bought and sold. This has made attempts to value it difficult.

Many supporters are holding on to them in anticipation of higher valuations. Should they all sell at once, the price could tumble.

People have lost large amounts of money in steep drops in the value of cryptocurrencies, hacks and even scams linked with them.

British financial watchdog, Financial Conduct Authority (FCA), launched 52 investigations into alleged cryptocurrency frauds.

There is another problem with cryptocurrency, it can pass international borders swiftly because they are not regulated, in a way cash or regular investments are; which makes investigating thefts hard.

Last month, the FCA issued a stark warning to investors in so-called crypto-assets.

The financial watchdog said investors should be “prepared to lose all their money” should their investment’s value collapse