Bitcoin's time has come. Or, at least, it's getting closer.
Brokerage firm Goldman Sachs Group Inc. (GS) published a report this week showing that the value of bitcoin and other so-called cryptocurrencies has reached nearly $120 billion. That's twice the size of Costa Rica's entire economy, based on World Bank data. As recently as last year, the total market value was below $20 billion.
In other words, the growth in the virtual currencies has been so rapid that an established Wall Street titan like Goldman Sachs is now trying to demystify the market for big portfolio managers at mutual funds, hedge funds, pension funds and insurance companies. That's despite the fact that the U.S. Internal Revenue Service has denied them legal-tender status in any jurisdiction, treating them as property for tax purposes.
"It's getting harder for institutional investors to ignore cryptocurrencies," the Goldman Sachs analysts wrote in the report.
The New York-based firm is turning its attention to the nascent market as Bitcoin prices have quintupled in the past year to $3,473, according to news and data provider CoinDesk. The dramatic climb -- albeit noticeably pocked by major price crashes even in the past month -- has attracted the attention of true-believing traders as well as timely opportunists.
And Goldman Sachs isn't the only big U.S. bank weighing in on bitcoin's meteoric rise. Wells Fargo & Co. (WFC) , based in San Francisco, published a "special report" on the virtual currency on Thursday, Aug. 10. Wells Fargo Investment Institute's Bobby Zheng noted that bitcoin is increasingly accepted as a form of payment by companies including Microsoft Corp. (MSFT) , Expedia Inc. (EXPE) and Intuit Inc. (INTU) .