Bitcoin price rebounds to £130-mark after major slump

Bitcoin rates have recovered after facing a major decline at the start of 2015, rising by more than 15 per cent.

At the time of writing, the cryptocurrency was trading at $209.05 (£137.66) according to CoinDesk.

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The rebound comes after bitcoin experienced a major slump at the start of the year, having decreased in value by more than 40 per cent since 1 January. The last few days in particular have hit the digital currency hard, with decreases of 21.9 per cent on 14 January and 15 per cent on the previous day, according to the International Business Times.

2013 was described by some analysts as the “Year of Bitcoin,” with the currency reaching a record high of $1,242 (£818). However, since then it has struggled, dropping in value by 58 per cent across 2014.

Recent falls have been blamed on a security breach at one of the largest bitcoin exchanges, Bitstamp, which resulted in the theft of $5 million (£3.29m) worth of bitcoin. Decreases in value have also seen large-scale bitcoin mining firms cease operating as profits drop.

Bitcoin initially launched in 2009 and while it remained an underground phenomenon for many years, some mainstream businesses are now beginning to recognise the currency. In fact, last year the island of Jersey claimed that it wanted to become the world's first "bitcoin isle," using the currency to foster the growth of digital businesses. However, many governments have expressed their concern over the currency and suggested regulating its use.

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Bitcoin has its fair share of both supporters and detractors, with the former praising the anonymity and freedom it offers and the latter warning of the inherent risks involved with an unregulated currency. The reputation of cryptocurrencies is also not helped by the fact that they are often associated with buying illegal goods through online black markets, such as Silk Road Reloaded.