Bitcoin is booming. The price of the virtual currency recently soared to more than $1,000, up from just $15 in January. Originally invented to facilitate anonymous and encrypted online payments, Bitcoin has recently attracted the attention of large-scale investors who use the currency as an object of speculation. These speculations have resulted in a surge of Bitcoin trading volume and an increase of the currency's volatility.
The daily transaction volume of Bitcoin is already higher than that of the global payment network Western Union and only 27% short of PayPal's daily transaction volume. As opposed to services such as PayPal though, the use of Bitcoin in the retail and commercial marketplace is relatively small and the lion's share of daily transaction can be attributed to speculation.