To paraphrase Ronald Reagan, “Here we go again.”
Bitcoin is on everyone’s lips this week and the price has gone nuts — shooting past $17,000 per bitcoin in Thursday’s trading.
It has rocketed up $5,000 in less than a week, prompting wall-to-wall news coverage that is giving Sen. Al Franken, D-Minn., Russia, the FBI and even President Donald Trump a run for their money. The value of the digital currency — or cryptocurrency — is up about 15 times this year.
If you were around during the frenzy of the late 1990s dot-com bubble, the bitcoin mania might have a familiar cast: A new technology that was misunderstood yet spawning hundreds of companies and resulting in speculative trading
Q: What is bitcoin?
A: It is an electronic form of currency that has no physical presence anywhere in the world. There are no physical ‘coins’ like dimes, nickels and quarters. Bitcoins, like other cryptocurrencies, exist on the internet.
“It is fundamentally a piece of computer code and software that verifies transactions,” said JR Lanis, an attorney with Drinker Biddle.
Q: Why has the price gone crazy?
A: This one is easy.
Limited supply. And, apparently, unlimited demand — at least for the moment.
People are buying up bitcoins, driving up the price of the 16.7 million coins in circulation to a total value of $265 billion as of midday Thursday. That’s not quite the size of Bank of America, but getting there.
Q: How can I buy bitcoins?
A: Two ways. First, you can go on websites such as Coinbase or Gemini that trade digital currency and open an online account.
That’s what Leya Yusupov, a 37-year-old mother who lives in Queens, did.
“I downloaded the Coinbase app, and created a password. Then I connected my account with my bank account,” said Yusupov, who bought her first shares in August.