Bitcoin enjoys end of year price surge

Indian rupee notesImage copyright

Image caption

Indian efforts to control ‘black money’ is prompting more interest in bitcoins

The value of the Bitcoin virtual currency has hit a three-year high with each one now worth about $900 (£730).

At the start of 2016, single coins were only worth around $435 but their value has climbed steadily all year.

The steady upward progress has continued despite regular hack attacks on virtual currency exchanges in which coins have been stolen.

Experts said the rise in value was linked to the long-term depreciation of the Chinese Yuan.

Stolen coins

The Chinese currency has dropped about 7% in value during 2016, said Reuters. The majority of Bitcoin currency trading takes place in China as it allows people to skirt restrictive local laws that limit how much money Chinese people can swap.

Charles Hayter, founder of the Cryptocompare website that watches virtual currencies, said global political uncertainty and Indian moves to control paper currency were also driving people to buy Bitcoins.

If those trends continued, he told Reuters, many more people may be tempted to buy Bitcoins as they could be seen as a “flight to safety”.

Hackers have also been tempted by the rising value of the virtual coins. In August Hong Kong-based digital currency exchange Bitfinex suffered a major hack attack in which bitcoins worth $65m were thought to be taken.

Bitcoin values dropped about 10% when the news of the hack attack was made public

The virtual currency has yet to reach the heights it managed in late 2013 when each coin was worth more than $1,000. The total value of all bitcoins in circulation has now surpassed $14bn.