Bitcoin is changing hands at over R100 000 on some trading platforms as of Wednesday morning. The price touched a new all-time high of R103 999 on local platform Luno and was last quoted at R100 001.
Local investment website Sharenet had bitcoin quoted at R99 903 as of 9.12am.
At the time of writing, Coindesk said bitcoin was trading at $6 390.87, translating into a rand price of R90 239.08.
However, bitcoin is trading at a higher price in South Africa for a number of reasons, according to cryptocurrency expert Farzam Ehsani.
Ehsani, the blockchain lead at Rand Merchant Bank, said the reason for the price difference comes down to supply and demand in the local market as well as exchange control regulations, which limit the ability to arbitrage the difference in price between local and international exchanges.
Bitcoin has been on a tear in 2017, adding 570% to its value since 1 January in dollar terms. Over 12 months, the cryptocurrency has appreciated by 802% and over five years by 62 725%.
It extended gains to a new record on Wednesday after the CME Group’s announcement of a possible futures contract was seen as a source of legitimacy for the world’s most popular digital currency.
The cryptocurrency rose as much as 3.7% to $6 616 as of 10.50am in London, in a third day of gains. CME Group announced on Tuesday that it plans to introduce trading in bitcoin futures by the end of the year, only a month after dismissing such a plan. CEO Terrence Duffy cited increased client demand as a key reason for the change of mind.
The move offers the world’s largest cryptocurrency an important official recognition, and a chance to go mainstream. With the launch of futures contracts, more institutional investors will be able to invest in bitcoin, having been previously prevented from doing so for regulatory reasons.
Liquidity in bitcoin trading is also expected to increase with the move and creation of bitcoin futures should make it easier to create an exchange-traded fund based on the digital asset. — Reported by NewsCentral Media, with additional reporting by by Tugce Ozsoy of Bloomberg
