Bicoin surpasses $14,000 in new high

Bitcoin shot to a record high of $14,047.40 yesterday, extending its gains from $1,000 at the beginning of the year. The cryptocurrency rose 2.94 per cent at $14,030.00 at the Luxembourg-based Bitstamp exchange.

Bitcoin continued to rally on Wednesday, breaking above $13,000 to a record high even as doubts increased about the cryptocurrency's real value and fears about a dangerous bubble grew.

Bitcoin also gained from yesterday's announcement by the main US derivatives regulator that it would allow CME Group Inc and CBOE Global Markets to list bitcoin futures contracts.

According to commentators, the move would subject the cryptocurrency to added regulation but also fosterf mainstream adoption, as bitcoin futures and other derivatives would make it easier to trade the new asset class.

"Simply the perception in households around the world that the CME and the CBOE are providing legitimacy to bitcoin is really what is driving the massive rally here," said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto, Reuters reported.

The rapid rise of the digital currency of over 10-fold from below $1,000 at the start of the year has drawn regulatory scrutiny around the world.

Meanwhile, some of the biggest derivatives brokerages in the world have criticised plans by US exchanges to offer bitcoin futures and options, saying the contracts had been rushed to the market without proper consideration of the risks.

The brokerages, who communicated their concerns in an open letter via the Futures Industry Association on Wednesday, said exchanges had failed to gather enough feedback from market participants on margin levels, trading limits, stress tests and clearing.

Pointing to Bitcoin's increasing volatility and reliance on unregulated venues for pricing, the brokerages raised doubts over whether the exchanges had the tools to prevent market manipulation.