Bitcoin smashes through $10,000 barrier for first time ever, sparking fresh fears of a bubble

Total value of bitcoin in circulation now exceeds the stock market valuation of corporate giants including McDonald’s, IBM and Disney

Bitcoin’s value has surged more than tenfold this year and has jumped by a fifth in the last three days alone (Bloomberg)

Bitcoin has burst through the $10,000 mark for the first time in its history, sparking fresh fears that the digital currency has created a bubble that could be about to burst.

On Tuesday morning, one bitcoin cost $10,035 on the CEX online digital currency exchange. Some other exchanges, including Coinbase, were offering bitcoin for sale at around $9,900.

The total value of bitcoin in circulation now exceeds the stock market valuation of corporate giants including McDonald’s, IBM and Disney.

Bitcoin’s value has surged more than tenfold this year and has jumped by a fifth in the last three days alone. Anyone who put their money into the cryptocurrency at the start of October would have already seen a 100 per cent return on their investment.

Such an eye-watering ascent has begun to attract hedge funds and other big investors who fear they may be missing out on the party.

Digital currencies have largely been shunned by heavyweights in the City and on Wall Street, but the prospect that bitcoin could soon cross over into the financial mainstream has encouraged speculators to pile in.

​Coinbase added 300,000 users between Wednesday and Sunday, during the US Thanksgiving holiday, and now boasts 13.3 million users, according to data cited by Reuters.

The world’s biggest derivatives exchange operator, CME, which owns the famous Chicago Mercantile Exchange trading floor, said last month that it would begin offering bitcoin futures.

Contracts will be settled in cash, meaning investors will receive payment based on the difference between the price they bought and sold at in dollars, rather than in bitcoin. Some analysts have speculated that this could attract institutional investors.

Even JPMorgan, headed by one of bitcoin’s staunchest critics, Jamie Dimon, is said to be considering helping its clients trade contracts linked to the cryptocurrency.

Mr Dimon has in the past called people who buy bitcoin “stupid” and said he would fire any of his employees who he found trading it.

Data from the World Coin Index shows that the amount of bitcoin being traded has not kept pace with its value, which is potentially a sign of a bubble.