This week alone, the digital currency Bitcoin surged $5,000 to a new high of $18,000 before correcting back to $15,000. The cryptocurrency is up nearly 2,000 percent over the year. If you had invested $100 in January, it would be worth $2,000 today.
Nobody knows why it's up so much, but everyone wants in. From bus drivers to grandmothers to first-time investors, Bitcoin is the year's hottest commodity.
Chen Wu, an associate professor of finance at the University of Texas at Tyler, said that the price of Bitcoin is becoming a self-fulfilling prophecy.
"Much of the latest surge in Bitcoin prices is nothing more than a self-feeding mania, or FOMO, fear of missing out," he told NBC News in an email. "The more the media report Bitcoin price topping — whether it’s $10,000 or $16,000 — the more short-term speculators want to move in, and this in turn drives it even higher. It's reminiscent of the Dutch tulip mania in the 17th century and the dotcom bubble of the late 1990s."
After starting the year at around $800, Bitcoin has risen and then fallen on several occasions, each time recovering and going on to new highs. In May, it more than doubled, hitting $2,000. In August, it broke $4,000 for the first time.
The price is highly volatile in the still relatively small capitalization market where it's easy for an individual or small group transaction to have an outsize impact on the market. Double-digit percent crashes within a short period of time aren't uncommon.
On Dec. 18, the Chicago Mercantile Exchange will begin offering Bitcoin futures that would allow people to bet on the price itself of Bitcoin. And institutional investors who are barred from investing directly in an asset like Bitcoins could finally take part.
More conservative money that had been watching the price rise and sitting on the sidelines could get in on the action. Some futures were betting the price of Bitcoin might hit $10,000 by the end of the year. It's since beaten those odds handily.
In a sign of the times, Craigslist sellers this week can now click a checkbox to indicate that they accept cryptocurrency as payment.
The South Korea connection
Despite only being a fraction of the world economy, South Korea has been a major driver of Bitcoin. When the cryptocurrency first hit $10,000, it was on South Korean exchanges.
South Korea already had one of the most active markets for foreign currency speculative trading, and Bitcoin and other cryptocurrencies are just the latest way to play. But it's reached enough of a fever pitch that the prime minister recently weighed in to warn that Bitcoin could corrupt the nation's young people.
"This can lead to serious distortion or social pathological phenomena, if left unaddressed," said Lee Nak-yeon. “There are cases in which young Koreans are jumping in to make quick money, and virtual currencies are used in illegal activities like drug dealing or multilevel marketing for frauds.”
Financial planners and industry leaders are bearish on the phenomenon, warning of an eventual crash.
“You can’t value Bitcoin because it’s not a value-producing asset," famed investor Warren Buffett recently told Marketwatch. "It's a real bubble in that sort of thing.”
Other experts warn of behavior on some of the unregulated online exchanges that allow for "wash trading." Banned on U.S. stock exchanges, it's essentially when investors sell an asset to themselves. When done repeatedly it can create the illusion of heightened demand and drive the price up.
For now, investors, many of them small-time, are just enjoying the rush.
New Jersey ironworker Greg Salerno, 40, was one of those who got into Bitcoin early. He told several of his fellow ironworkers about it, and a handful began to invest as well.
This week, one of them cashed out for $300,000, tipping Salerno $2,000 for the advice. Another pulled up to the job site this week in a brand new $70,000 truck, his purchase fueled by over $800,000 in Bitcoin gains.
"It feels nice so that these guys aren't left behind. These opportunities don't come around too often," Salerno told NBC News.
For his part, Salerno isn't cashing out to upgrade his ride any time soon. Unlike Bitcoin, trucks are a depreciating asset.
"I'm not selling," he said. "If they went a quarter million I might sell a couple just to have something. Other than that, I'm all in."