Bitcoin: How high could the price go? | CBS News

When Saxo Bank forecast last December that Bitcoin’s price would surpass $2,000 in 2017, it may have seemed like a stretch given that the digital currency’s value at the time was under $1,000. Now, with Bitcoin surging, the same analyst who made the earlier forecast has a new prediction: The price could soar to $100,000 over the next 10 years.

While Bitcoin fans say such projections are within reason, skeptics abound, with Vanguard founder Jack Bogle this week urging investors to avoid the digital money “like the plague.”

“Bubbles always pop,” Jonathan A. Martin, a professor of finance at MIT’s Sloan School of Management said by email. “And cryptocurrencies have value only because people believe they will have value in the future.  As soon as that belief starts to fade, it’s over.”

For now, that belief is acting like rocket fuel and sending Bitcoin’s value into the stratosphere. The price topped $11,400 on Wednesday morning, an increase of more than 930 percent since the start of the year.  As the day progressed, prices fell again and as 3:17 p.m. New York Time they were at $9,669.79 after Coinbase, the largest Bitcoin exchange, experienced sporadic outages.

Even so, Bitcoin’s growth is impressive. Its market capitalization now exceeds $161 billion, nearly double the market value of iconic Wall Street firm Goldman Sachs (GS).

By comparison, New Zealand’s gross domestic product is $176 billion, while in mid-2010, or roughly two years Bitcoin was created, it was valued at 8 cents.

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Bitcoin: How high could the price go? – CBS News.