Chart of the Week: Bitcoin bubble, toil and trouble

Despite being intrinsically worthless, the price of one Bitcoin has now surged through $7100, meaning it is now worth almost six times as much as an ounce of gold. As the most well-known and widely-traded virtual currency, Bitcoin allows users to bypass banks and other payment processes to pay for goods and services directly, without the need for an intermediary. Proponents say this gives it value, along with the blockchain technology it’s built on. But the question remains, is it in a bubble? Using the tipping point for Bitcoin of 2013 where its usage had begun to level off, we calculated that its current price is almost six standard deviations above its long term average.

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