During the past four months, the best performer among the world’s currencies, and across just about every imaginable asset class, has been Bitcoin, a country-less digital exchange medium invented in 2008 by someone who remains anonymous to this day. In fact, he hasn’t been heard from in over a year.
Bitcoin.org describes itself as “an open source [peer-to-peer] digital currency.” At the end of 2012, one Bitcoin traded for around $15. Last week, it briefly broke $200 before a roller-coaster trading session left it closer to $100 on Friday. How can this be? Bitcoins have no intrinsic value, no guaranteed exchange rate, and aren’t backed by gold or silver. Then again, the same could be said for that dollar in your pocket.