More than $100 billion in new money poured into Bitcoin in just the past few months, with investors hoping the digital currency will make the leap from a niche online market to a mainstream financial institution.
But the currency’s volatile price has left many investors worried about the long-term viability of the virtual currency.
“There are concerns that the Bitcoin price will remain so high, that it will continue to be the ‘Bitcoin bubble,'” said Scott Clements, chief executive officer of the investment research firm Clements Global Advisors.
“I think the market is just so dependent on the ability of Bitcoin to grow and it has not.”
The cryptocurrency is widely known for its rapid growth during the past year, but it has also struggled to gain traction in traditional finance.
On Monday, the price of Bitcoin was up more than 10% to $11,800 on the Bitstamp platform, according to CoinDesk.
The volatile currency is traded on a vast network of exchanges, many of which have been hacked or closed by hackers in the past.
Bitcoin has been around for more than seven years, but its current value is more than $1,000 per coin.
Its price has soared in recent months, driven by a surge in demand for the digital asset.
But analysts warn that the growth in adoption has come at a high price, particularly among consumers who want to trade the currency at an instant.
The price of a Bitcoin is calculated by using a mathematical formula that assigns a value to every bitcoin held on the blockchain, a distributed ledger that stores transactions and records the transactions themselves.
The digital currency has exploded in popularity in the years since its inception in 2009.
The value of a single bitcoin has surged from less than $10 in 2011 to nearly $20 by late 2014.
The currency has also gained popularity for those who want quick and cheap payments.
Bitcoin was created to address a growing problem of money laundering.
In the past two years, the government has shut down more than 1,500 banks and forced thousands of people out of the banking system in an effort to combat money laundering, according a report from the Department of Justice.
The government has also shut down exchanges and other digital platforms that were used by drug cartels to launder money.
But it has failed to crack down on the underlying Bitcoin network that facilitates transactions.
That led to widespread speculation among investors that the digital money will one day be used for criminal activity.
Bitcoin’s price has been soaring since its introduction.
On Friday, it jumped more than 15% to a high of $11.75.
By Tuesday morning, it had risen to more than 21% above that level, according the CoinDesk Bitcoin price index.
The cryptocurrency has been used as a form of payment for online goods, as well as for illegal activity.
But its price has also been driven by the demand for fast and cheap transactions.
The number of transactions on the network grew from about 6,000 in April to about 1.8 million by mid-October, according data from Blockchain.info, a cryptocurrency research company.
The growth of the digital market has led to speculation that Bitcoin could eventually be used to fund terrorism.
A study by the RAND Corporation, a libertarian think tank, said that a terrorist attack using Bitcoin to fund a plot against the U.S. would require the digital equivalent of about $1.5 million.
But Bitcoin is a digital currency, and its value fluctuates over time.
The FBI has not commented on its use as a money laundering tool, and the Bureau of Alcohol, Tobacco, Firearms and Explosives has not confirmed that Bitcoin transactions are involved in drug trafficking.
Some critics of Bitcoin are concerned that the technology could ultimately allow criminals to make illegal payments to support terrorist groups.
“Bitcoin is an incredibly risky and volatile investment, especially for the people who hold it,” said Mark L. Perry, a partner at law firm Covington & Burling.
“That is why it is such a hot topic.
You need to be very careful when you are making that kind of investment.”