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Tuesday Apr 13 2021

Bitcoin crosses $62,000 ahead of Coinbase IPO

In this file photo taken on June 17, 2014 in Washington, DC bitcoin medals are pictured. Photo: AFP 

LONDON: Cryptocurrency Bitcoin on Tuesday hit a record high as it crossed $62,000 ahead of cryptocurrency exchange Coinbase IPO on Wall Street.

Bitcoin reached $62,377, a huge gain of 114% since the start of the year.

After crashing in 2018, the value of bitcoin rebounded and it has set records since late last year — rocketing from around $12,000 in October to more than $60,000 a month ago.

The arrival on Wednesday of cryptocurrency exchange Coinbase on the Nasdaq is one of Wall Street's most anticipated events of the year even though some question whether the cryptocurrency market is sustainable.

Estimates of Coinbase's value vary depending on how it is calculated, but its capitalisation is expected to range from $70 to $100 billion.

Read more: Cryptocurrency market capitalisation hits all-time peak of $2 trillion, bitcoin at $1.1 trillion

That would make it the largest initial public offer (IPO) for a US company since Facebook in 2012.

Founded in 2012, the platform allows users to buy and sell about 50 cryptocurrencies.

The cryptocurrency market has grown exponentially in 2021 and is now worth a staggering $2.0 trillion as it increasingly attracts interest from big names on Wall Street.

While anybody can "mine" for new bitcoins, to do so requires giant data centres, which has led to platforms such as Coinbase providing a way of trading in cryptocurrencies.

Read more: Bitcoin reverses course sharply after hitting weekend record

Banks and payment services such as Paypal allow transactions in certain digital currencies.

Despite 12-year-old bitcoin's volatility and limitations as a means of payment, it is seen as a store of value to rival and perhaps one day surpass gold as a haven investment in the face of high inflation for example.

Electric car giant Tesla has invested $1.5 billion in bitcoin and in March began accepting the currency as payment.

Read more: Why did Bitcoin break a three-year-high price record?

Tesla's multi-billionaire chief executive Elon Musk has also used social media to espouse the merits of cryptocurrencies, helping to lift interest and prices.