Whatever you want to call it, Bitcoin is on an extraordinary run, with the price of a single Bitcoin crossing $10,000 on some exchanges for the first time on Monday — less than two months after it crossed $5,000 for the first time.
It is a bull market with few precedents in recent investing history. The Dow Jones industrial average, in its biggest year, 1915, went up 82 percent, or one-tenth as much as Bitcoin has gone up this year. Amazon’s red-hot stock is up only one-fifteenth as much as Bitcoin this year.
The price has been pushed up by a flood of new buyers from around the world who think they have spotted a new kind of investment that could ultimately compete with gold as a place to store money outside the control of companies and governments.
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These mainstream investors have not just been the libertarian-minded programmers who helped Bitcoin survive its rocky first seven years, after the mysterious creator Satoshi Nakamoto released it in 2009.
In recent months, trading among ordinary investors has taken off in South Korea and Japan. Seoul now has multiple In recent months, trading among ordinary investors has taken off in South Korea and Japan. Seoul now has multiple storefronts where less technically adept people can buy and sell Bitcoin. It was on Korean exchanges where the price of Bitcoin first hit $10,000 on Monday.
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On American exchanges, the price was hovering around $9,700 on Monday.
The skyrocketing price has brought forth no shortage of skeptics, from Jamie Dimon, the chief executive of JPMorgan Chase, to Warren E. Buffett, who have variously called it a fraud, a bubble and a Ponzi scheme.
The untethered price increase has, to a degree, proved their point, suggesting that this is an investment tied to few real-world fundamentals.
But each time the skeptics have come forward, investors have defied them and bought more Bitcoins at higher prices. On Sunday, more than $5 billion was traded on Bitcoin exchanges, according to the data site Coinmarketcap.com — a greater volume than what many American stock exchanges see on a normal day.
Believers in the Bitcoin technology, which is backed by a new kind of computer network, have argued that what we are seeing is the formation of a new asset class that could join stocks, bonds and physical commodities in the investment portfolios of ordinary people.
If this is a new digital gold, today’s extraordinary prices still leave the total supply of Bitcoins in the world at a value that is only one-sixtieth of all the real gold in the world.
But even aficionados have been dumbstruck by just how quickly the price has gone up in recent months.
“While there has been a slew of bullish news for Bitcoin of late, the rapidity of the ascent to $10,000 has taken many of us by surprise,” said Chris Burniske, an investor and a co-author of the book “Cryptoassets.”
Or as one trending comment on the Reddit social network put it: “This is officially madness. I am going to prepare myself for a large correction.”
Hedge funds have also been clamoring to get a piece of the action. More than 100 hedge funds invest only in Bitcoin and other virtual currencies.
In many places, this trading is happening on exchanges with little regulatory oversight or transparency. This has given rise to fears that a problem at one of the exchanges could trigger a panicked run on Bitcoin, something that is not unlikely given the relative inexperience of many of the new investors.