Bitcoin Price Crosses $1000 Again Amid Emerging Market Sell-Off

Bitcoin prices rose above the $1,000 (€731, £606)-mark once again, as investors relied on the digital currency as an alternative asset, countering the negative effects of a sell-off in emerging markets.

Bitcoin rose to a high of $1,038 on Tokyo-based MT Gox bitcoin exchange, the strongest level since January 7.

Emerging markets that are dependent on external financing are selling off risky assets due to concerns about China's economic slowdown and expectations of further scaling back of economic stimulus by the US Federal Reserve.

The sell-off boosted demand for alternative assets such as the yen and gold. The rise in bitcoin prices indicates that a growing number of investors have added the digital currency into their list of alternative assets.

Volatility

Bitcoin has steadily been gaining in popularity despite the volatility in its value. The virtual currency exists as software and is not backed by any country or banking authority.

It was launched in 2008 and is traded within a global network of computers. They can be transferred without going through banks or clearing houses, reducing fees involved in the services significantly.

It peaked at $1,250 in November 2013, but then plummeted to as low as $640 after China's central bank barred the country's banks and third-party payment processors from dealing in bitcoin.