Bitcoin tops global currency league in 2015

Currency moves on from woes of 2014 as late-stage rally sends it soaring ahead of real-world rivals

While it will no doubt come as a shock to many observers of the emerging wave of virtual currencies, new findings show that thanks to a late-stage rally, Bitcoin grew by 35% last year, relative to the US dollar.

Bitcoin’s dramatic reversal of fortune, following a dreadful 2014, was highlighted by specialist research outlet The Money Project: a collaboration between bullion dealer Texas Precious Metals and data-illustration site Visual Capitalist.

Using the US Dollar Index – a comparison benchmark against a basket of major currencies – the Israeli shekel was found to have gained 0.3% last year, while the dollar grew by 8.3%.

But Bitcoin was far and away the leader, with long-established currencies the Japanese yen and Swiss franc effectively flatlining, finishing 2015 in exactly the same shape in which they started it.

Much of the currency’s success was attributed to a November surge of activity within the Bitcoin Investment Trust: a trading platform operated by specialist digital-money advisers Grayscale.

The resurgence is a remarkable feat for Bitcoin, which suffered a series of damaging events in 2014 that many experts predicted would sharply diminish the currency’s long-term prospects.

In February that year, leading Bitcoin exchange platform Mt Gox collapsed, following the loss of 850,000 coins with a total, real-money value of $473m. Subsequent investigations revealed that Mt Gox had made an earlier loss and concealed it. Later, as the year drew to a close, HSBC pulled out of plans to co-found the world’s first, fully regulated Bitcoin investment platform, citing money-laundering concerns.

However, The Money Project stressed: “Bitcoin is no stranger to extremes. During the year it came into the mainstream in 2013, [it] gained 5,429% to easily surpass all other currencies in gains.”

The findings emerged as Netflix CFO David Wells hinted at a Citigroup investors’ conference in Las Vegas that it was only a matter of time before his on-demand streaming service would accept the currency as a means of payment.

“From an e-commerce perspective,” he explained, “[the world] is balancing security and fraud detection with frictionless sign-up… You have to authenticate – you have to make sure you have the right person, the right bank account – but you don’t want to run people through a 20-step process.”

That said, he added: “It sure would be nice to have Bitcoin in terms of a global currency that you could use globally.”

While The Money Project’s findings indicate that confidence in the currency is improving, issues with its underlying technology remain. This month, a scheme by two leading Bitcoin developers to boost the size of blocks available through the currency’s network failed to achieve the required adoption rate to proceed.

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