'Unstoppable' bitcoin surges past US$12,000

The notoriously volatile cryptocurrency has crossed a new milestone. Picture / 123RF

Bitcoin has continued its exponential rise in value, defying the naysayers to smash through the US$12,000 ($17371) milestone for the first time.

The notoriously volatile cryptocurrency crossed the latest milestone in the early hours of Wednesday US time, according to research site CoinDesk, surging by nearly 5 per cent in the space of four hours.

The latest price spike, which brings bitcoin's total rally since the beginning of the year to nearly 1200 per cent, follows news the Chicago Board Options Exchange will begin trading in bitcoin futures from December 11, allowing investors to bet on the rise or fall of the currency.

"It appears that the momentum is unstoppable and we do think that the US$14,000 level could [be reached] before bitcoin futures start trading at the CBOE," Think Markets chief analyst Naeem Aslam said in a note today.

"Principally, investors are thoughtful that when institutional money (hedge funds) will be involved, the chances are that the price would move higher. Large investment funds have not been able to take the piece of the pie yet and that would be their opportunity to get on board."

Aslam said bitcoin futures trading on the major stock exchanges within a regulatory framework would provide more assurance for everyday investors and provide a "tailwind".

But he warned that it was important to remember there were some hedge funds waiting to short bitcoin, or bet against its fall.

"They are highly interested in this speculative market and cannot wait to take the froth off," he said.

Bitcoin's total market capitalisation — the price multiplied by the number of coins in circulation — is now more than US$208 billion, according to Coinmarketcap, with the total market cap of all cryptocurrencies more than US$367b.

As bitcoin mania continues with seemingly no end in sight, debate rages as to whether it is the biggest bubble of all time or simply "digital gold" assuming its rightful valuation.

This week, the twin brothers who accused Mark Zuckerberg of stealing their idea for Facebook became the world's first bitcoin billionaires.

Tyler Winklevoss and Cameron Winklevoss have become the world's first bitcoin billionaires. Photo / Getty Images

Cameron and Tyler Winklevoss used part of their US$65 million settlement in 2009 to invest in US$11m worth of bitcoin, buying 1 per cent of total circulation at that time.

Meanwhile, a UK man who accidentally threw away a computer containing 7500 bitcoin — worth about US$90m at the current price — is offering his local council 10 per cent if they allow him to dig up a landfill to search for it.

On Tuesday, Brisbane jeweller Xennox Diamonds announced it would begin accepting bitcoin as payment, joining the likes of Microsoft and Subway in the US, while a growing number of properties are being offered up for sale in exchange for the cryptocurrency.