Mania Takes Off as Bitcoin Surges Past $5,000

The most popular digital currency, bitcoin, breached $5,000 for the first time, pushing this year’s gains to more than fivefold, according to Bloomberg.

As recently as December, bitcoin was trading at less than $1,000. Since then, it has dodged everything from tightening regulations, feuding factions splitting its underlying blockchain and warnings from the likes of JPMorgan Chase CEO Jamie Dimon of fraud and an eventual price collapse.

The latest leg higher is being driven in part by increasing institutional interest, with everyone from Goldman Sachs’s Lloyd Blankfein to Dimon saying they’re now open to ways to get involved. The change of heart comes amid growing optimism about the blockchain technology. “This record is an exciting milestone and sign of market confidence in the outlook for bitcoin and the underlying technology,“ said Iqbal Gandham, a managing director at eToro, a trading platform. “We expect many more milestones like this to come.“

Interest is growing by the day, as measured by searches on the Internet. SEMrush, a data analytics firm, found the price had a 96 percent correlation with Google searches on bitcoin, suggesting that growing interest in the cryptocurrency is helping to drive demand. There were about 300 references to cryptocurrencies or blockchain in Securities and Exchange Commission filings from U.S. companies this year. That compares with about 280 mentions in all of 2016, and around 20 in 2013.

Bitcoin isn’t the only one to benefit as lately it seems that shares of any company with even an indirect link to the cryptocurrency space is bound to rally. Overstock soared after announcing a regulated digital tokens exchange, while Goldmoney climbed after saying it will offer its clients the ability to trade and store bitcoin and rival digital currency ether. In June, Nvidia and AMD, which make hardware used in mining, rallied as ether surged to a record. Bioptix’s stock nearly doubled in the days leading up to the company’s announcement that it’s renaming itself Riot Blockchain.

Bitcoin’s rally and the proliferation of other digital assets is attracting the wary eyes of regulators globally. China and South Korea banned ICOs, while Russian President Vladimir Putin this week called for regulation of the sector. At least 13 other countries have imposed new rules or announced plans to tighten regulations. The digital currency’s surge has divided the financial community between those convinced it is a bubble on the verge of popping.