Bitcoin’s Runup Runs on As the Digital Currency Crashes Through the $7,000 Level

The U.S. payments community woke up Thursday morning to find Bitcoin setting yet another record, this time breaching the $7,000 level less than two weeks after soaring past $6,000. By mid-morning Central Time, the price stood at $7,132, according to Coindesk.

The cryptocurrency is testing new highs in the wake of news this week that Chicago-based CME Group Inc., the world’s biggest exchange group, is proposing a Bitcoin futures contract that it hopes to launch by year’s end, pending regulatory approval. That move, along with a parallel effort by cross-town rival Cboe Global Markets Inc., is seen as lending a new patina of respectability to a digital currency that has been routinely dismissed by leading financiers since its creation in 2008.

Yet Bitcoin has been on a tear throughout the year, having seen its value multiply seven-fold since New Year’s Day. That raging bull has pushed Bitcoin’s market capitalization from $15.5 billion to $119.8 billion, making it more valuable than Goldman Sachs.

Other factors could account for the rapid rise, as well. While there appears to be considerable uncertainty about the matter in the Bitcoin community, yet another hard fork in the cryptocurrency’s code could take place in about two weeks. This development would address a capacity issue on the Bitcoin network by doubling the size of blocks on its blockchain from 1 to 2 megabytes. Some investors might be buying up Bitcoin in anticipation of receiving free issues of the new currency as a result of the split in the code, according to Coindesk. This happened in the two previous forks, one in August that created Bitcoin Cash, and another last month that resulted in Bitcoin Gold.

Still, the split is far from a sure thing. Observers say at least some Bitcoin developers, who generally view the digital currency as a store of value, oppose the move. Miners, on the other hand, see Bitcoin as a payment method and favor the split as a way of clearing room for more transactions. Miners create new Bitcoin by applying massive computing power to complex mathematical problems.

The supply of Bitcoin is limited, by design, to 21 million. Currently, 16.7 million are in circulation.