A cryptocurrency, Bitcoin’s value crossed the $15,000 threshold on Thursday for the first time today, marking another milestone in its dizzying ascent.
Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralised digital currency – the system works without a central repository or single administrator.
In recent months, the cryptocurrency has undergone a staggering increase in value; surging from roughly $3,500 in mid-September to its current price, a report on theverge.com indicates.
At the start of the year, a single Bitcoin was worth less than $800.
Some traders in cryptocurrency opine that the despite its upward flight presently, its value will decrease in the future.
“[It’s] one of the greatest shorting opportunities ever,” cryptocurrency trader Lou Kerner told Bloomberg earlier this week.
“You have a lot of zealotries, and a lot of people, including me, who think it’s the greatest thing to ever happen in the history of mankind. You have a lot of people who think it’s a bubble and a Ponzi scheme. It turns out both of them can’t be right.”
The report noted that although the general trend for Bitcoin’s valuation is ”only up, the cryptocurrency has been extremely volatile.”
On November 29th, for example, its value fell 20 per cent in less than an hour and half; dropping from over $11,000, a tick above $9000.
However for its adherents, including many young Nigerians, such setbacks are only temporary, but skeptics caution that any plunge could end up being permanent.
”After crossing $15,000 earlier today, it’s value quickly dipped down to around $14,800,” the report added. The currency increased in value by $3, 500 within one week after surging more than 900 per cent this year.
Despite its increasing value, Nigerian authorities have warned citizens against storing their wealth in bitcoins, since it is unregulated. A report published by PREMIUM TIMES recently advised Nigerians not to engage in trading in cryptocurrency.
The financial sector insurance regulator, the Nigerian Deposit Insurance Corporation, NDIC, said this was because digital currencies are not issued by the Central Bank of Nigeria, CBN, hence are unregulated.
The Director Research, Policy and International Relations, NDIC, Mohammed Umar, said the mandate of the corporation does not include providing insurance cover to risks associated with trading with digital currencies not issued by the CBN.
Mr. Umar was speaking at a two-day annual workshop for Business Editors and Finance Correspondents on “Financial disruption of digital currency and it’s consequences on the banking and deposit insurance system.”
“The financial regulatory authorities are not playing catch up on the digital currency race in Nigeria. There is no country in the world that allows its citizens to use digital currencies as money not issued by the Central Bank,” Mr. Umar stated.
“No Central Bank will accept digital currency as a substitute for its national currency or part of its monetary system, when it is not able to control it.
“Nigerians must understand that adequate notice has been issued by all financial sector regulatory authorities, namely Central Bank of Nigeria, CBN and Nigerian Deposit Insurance Corporation, NDIC, to warn Nigerians who want to trade in bitcoins as gamblers.
“They can only do so at their own risk. The CBN cannot say anyone cannot trade with it and NDIC will not insure any trading in any currency not issued by the CBN.”
At the moment, the director said an inter-agency committee, involving the NDIC, Ministry of Justice, Economic and Financial Crimes Commission, EFCC, Nigeria Police, Department of State Security, DSS and other relevant agencies, had been established to, ”sanitise the system.”
He said the committee, with its secretariat at the CBN, would closely monitor the activities of digital money operators to ensure Nigerians were not exposed to unnecessary risks.