Bitcoin Market Surges to $128 Billion in Global Value

There's no doubt that the business of Bitcoin is booming. Despite international bans on cryptocurrency-related startups, digital hedge funds continue to pop up. The value of cryptocurrencies together sits at more than $170 billion USD, nearly 10 times where it started in January. Of that, Bitcoin's value has reached $128 billion. 

For the last few months, Bitcoin value steadily grew from $4,300 to its current $5,725. Investors anticipate a spike in value where Bitcoin could reach $7,000 per coin. This is largely due to two upcoming forks. (A Bitcoin fork is simply a split due to a change in the software of the digital currency.) Bitcoin Gold is scheduled for October 25 and SegWit2x is scheduled for mid-November. Previously, the cryptocurrency hit a previous high after splitting into Bitcoin (BTC) and Bitcoin Cash (BCH). 

The visible successes of an invisible currency have caught the attention of some of banking's biggest names. A few days ago, rumors popped up that Goldman Sachs had set up a Bitcoin trading desk. Ritholtz Wealth Management CEO Josh Brown sparked the conversation with a piece he wrote on Reformed Broker. Brown, an outright supporter of cryptocurrencies, predicted a "stampede" of major banks tapping into Bitcoin. 

"I mentioned a few weeks back that you can practically smell it in the air – the big money is coming into this space. I can’t imagine how that doesn’t blow the price up into the stratosphere," he said. 

However, despite indications from the CEO that he was thinking about Bitcoin, Goldman Sachs released a statement to clients that Bitcoin does not replace the gold standard. 

Still thinking about #Bitcoin. No conclusion - not endorsing/rejecting. Know that folks also were skeptical when paper money displaced gold.

— Lloyd Blankfein (@lloydblankfein) October 3, 2017

Major banks backing Bitcoin is expected to boost its overall market value slightly, but analysts haven't predicted precisely how much. 

Doubt Remains Among Financial Heavyweights

Bitcoin has been immensely popular for investors willing to take risks for the sake of a massive payout. Thanks to simple upgrades, becoming a Bitcoin miner and entering the world of cryptocurrencies is becoming easier each day. Those risks, however, mean constantly changing evaluations. Bitcoin also has a relatively short track record when compared to other currencies as it was created less than a decade ago. Many analysts specializing in long-term investments (i.e. mutual funds, insurance, retirement) have been incredibly outspoken regarding Bitcoin. 

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"While cryptocurrencies are probably here to stay, they are difficult to analyze, wildly volatile and some may be prone to fraud," said Trevor Greetham at Royal London Asset Management (RLAM), part of the Royal London life insurance company. Greetham discussed the issue in a recent report by Reuters. 

"Diversification is a good thing but that doesn’t mean investing in everything just because it’s there. We favor assets with a long track record in producing returns or reducing risks."

For other investors, it's the lack of regulatory bodies that make Bitcoin and other cryptocurrencies difficult. 

"There's no real asset backing or regulatory oversight, and that's a bit concerning," said Omkar Joshi, portfolio manager at Regal Funds Management. "At the end of the day, there's no real clarity about what the legitimate necessity of Bitcoin is, so it's not something we look at as an investment."