Bitcoin soars above $1,000 on popular exchange

November 27, 2013

It's been an amazing month for Bitcoin, the decentralized payment network that received a surprisingly positive reception last week at a pair of Senate hearings.

At the start of November, one Bitcoin traded for just a bit over $200. By mid-month it had soared to $400. Then, around the time of the Senate hearings, it rose briefly above $900. Earlier Wednesday, the price broke through the psychologically significant $1,000 barrier on Mt. Gox, the most popular exchange for trading Bitcoins for dollars.

The new high represents a massive windfall for those who purchased the currency early. For example, Gavin Andresen, who is now Bitcoin's lead developer, reportedly purchased 10,000 bitcoins for $50 early in the currency's life, giving away one Bitcoin at a time on a site called the Bitcoin Faucet. If he had held onto those coins, they would now be worth $10 million.

The Winklevoss brothers, Olympic rowers who were made famous by a high-profile dispute over the founding of Facebook, had amassed $11 million in Bitcoins by April 2013, when one Bitcoin was worth about $120. Earlier this month, we noted that the value of those Bitcoins had swelled to at least $32 million. Today, the value of their holdings have tripled again to at least $90 million.

It's important to note that the price of bitcoins varies significantly between exchanges. Mt. Gox, the most popular exchange for converting bitcoins to dollars, hasn't made it easy to withdraw dollars from the exchange. As a result, bitcoins on Mt. Gox trade at a premium relative to alternative exchanges. At publication time, bitcoins were trading for $950 on Bitstamp, the second most popular exchange, and for $915 on BTC-e.

RELATED: A few things you can buy offline (legally) with Bitcoins

 

 

 

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Brian Fung · November 27, 2013