x Abu Dhabi, UAEThursday 14 December 2017

Bitcoin at all time high as value surpasses $16,000

It climbed 67 per cent in one week

LONDON, ENGLAND - DECEMBER 07:  A visual representation of the digital Cryptocurrency, Bitcoin on December 07, 2017 in London, England. Cryptocurrencies including Bitcoin, Ethereum, and Lightcoin have seen unprecedented growth in 2017, despite remaining extremely volatile. While digital currencies across the board have divided opinion between financial institutions, and now have a market cap of around 175 Billion USD, the crypto sector coninues to grow, as it continues to see wider mainstreem adoption. The price of one Bitcoin passed 15,000 USD across many exchanges today taking it higher than previous all time highs.  (Photo by Dan Kitwood/Getty Images)
LONDON, ENGLAND - DECEMBER 07: A visual representation of the digital Cryptocurrency, Bitcoin on December 07, 2017 in London, England. Cryptocurrencies including Bitcoin, Ethereum, and Lightcoin have seen unprecedented growth in 2017, despite remaining extremely volatile. While digital currencies across the board have divided opinion between financial institutions, and now have a market cap of around 175 Billion USD, the crypto sector coninues to grow, as it continues to see wider mainstreem adoption. The price of one Bitcoin passed 15,000 USD across many exchanges today taking it higher than previous all time highs. (Photo by Dan Kitwood/Getty Images)

Bitcoin rocketed to a lifetime high well above $16,000 on Thursday after climbing some 67 per cent over one week, intensifying the debate about whether the cryptocurrency is in a bubble about to burst.

The largest U.S. cryptocurrency exchange struggled to keep up with record traffic as the price surged, with an upcoming launch of the first bitcoin futures contract further fueling investor interest.

Proponents say bitcoin is a good medium of exchange and a way to store value, much like a precious metal. They also argue it is preferable to traditional currencies because it is not subject to central bank manipulation.

The supply of bitcoin will eventually be capped at 21 million, and some 16.7 million have already been released.

But critics say that the price run-up is a bubble that has been driven mostly by speculation, leaving bitcoin vulnerable to a sharp reversal. JPMorgan Chase & Co (JPM.N) Chief Executive Jamie Dimon famously called bitcoin a fraud in September.

“Bitcoin remains a major gamble as it is very much an asset that remains in uncharted waters, we’ve simply not experienced this before,” said Nigel Green, founder and chief executive of deVere Group.

“Also, an asset that goes almost vertically up should typically raise alarm bells for investors,” he added.

Read more: Red hot bitcoin scorches past $15,000 but hacking concerns surface

The world’s biggest cryptocurrency has surged seventeen-fold in value so far this year.

The latest move brought its so-called market cap, its price multiplied by the number of bitcoins in circulation, to nearly $305 billion, according to Coinmarketcap, a trade website. By comparison, the market value of Wal-Mart Stores Inc (WMT.N) is around $288 billion.

Analysts said the launch slated for this weekend of bitcoin futures by Cboe Global Markets Inc’s (CBOE.O) Cboe Futures Exchange, one of the world’s biggest derivatives exchanges, was helping drive up the price on expectations it would draw more investors to the market.

The CME Group will launch bitcoin futures one week later, while Nasdaq Inc (NDAQ.O) plans to get into the mix next year.

It is not clear to what extent big U.S. banks will participate in the new bitcoin-related activity.

Goldman Sachs Group Inc (GS.N) will clear bitcoin futures for certain clients when they go live, a spokeswoman said on Thursday.

The bank is “evaluating the specifications and risk attributes for the bitcoin futures contracts as part of our standard due diligence process,” spokeswoman Tiffany Galvin said.

Bitcoin climbed as high as $16,615.62 on the Luxembourg-based Bitstamp exchange BTC=BTSP, up nearly 22 percent on the day. It was last at $16,607.14.

Coinbase, the largest U.S. platform for buying and selling cryptocurrencies, said on Thursday on Twitter that it had experienced an outage due to record traffic. The venue was last up and running.

Some investors said they still see scope for bitcoin to soar even higher.

“It will hit potentially $20,000 because so much capital is coming in and it’s the most liquid secure coin out there,” said David Drake, founder and chairman of DLJ Capital, a family office in New York.

Other trading venues showed different prices for bitcoin, which trades in more than 100 cryptocurrency exchanges that are not accountable to any central authority. For instance, at institutional trading platform GDAX, bitcoin topped $19,000, while it hit above $16,000 at itBit.

Those price discrepancies could add another level of speculation by introducing the prospect of arbitrage trades between the markets.