The price of virtual currencies like Bitcoin is surging to $500m, a major milestone for the virtual currency.
The cryptocurrency surged more than 50 per cent in value in a week, climbing to $5,000 in early Thursday morning trade.
Bitcoin’s value has soared more than 200 per cent since the start of the year, when its value was pegged at $10,000.
The currency has now risen more than $1,500 in less than 24 hours.
It’s not clear how much the cryptocurrency will continue to rise in value.
The price jumped to more than a dollar a bitcoin on Wednesday morning on the New York Stock Exchange.
But it rose further, to about $6,000, after news that China’s central bank was preparing to tighten monetary policy.
The move came after the Chinese central bank announced it would start raising interest rates on Friday, and it is expected to increase its benchmark rate from the current 7 per cent to 8 per cent over the next year.
Chinese authorities are concerned about inflation and the possibility of an economic slowdown, which they say could trigger a financial crisis.
The yuan has been falling against the dollar in recent days, hurting global demand for imports.
Investors are also worried about a potential economic slowdown in the US, where President Donald Trump has said he wants to ease the US economic pain by allowing banks to lend money to people and businesses that are not part of the official government debt market.
Bitcoin has been on a meteoric rise over the past year, which is why it’s often used as an alternative currency.
Bitcoin was initially created as a way to exchange goods for cash.
It has since been adopted as a payment system for online shopping, as well as online payments in other ways.
It is traded in online markets like China, Japan and India.
China’s official exchange rate has been pegged to the US dollar since 2014, which means it is worth far less in dollars than it was a year ago.
In June, the country’s central banking regulator said it would allow a one-time cash injection to prop up the yuan to try to offset the sharp depreciation of the currency in the past two years.
The announcement was a major step towards easing the currency, which has plunged more than 20 per cent against the US currency in just three months.
But the decision by the Chinese government to let the yuan depreciate was also seen as a sign that the central bank would allow the currency to weaken further.