Coinbase: Bitcoin's spike into the stratosphere is unlikely due to firms buying to pay cyber ransoms

http://www.cnbc.com/video/3000622135

The incredible surge in bitcoin can be attributed to the market trying to fairly value this new asset, a Coinbase executive told CNBC on Friday.

Adam White, head of Coinbase's digital currency exchange, dispelled the notion that bitcoin's nearly 50 percent rise over the past two weeks can be traced to the global WannaCry attack. The ransomware that started crippling computers on May 12 demands bitcoin from victims.

"I think that's a stretch. You see billions of dollars of digital currency trade every day. It's unlikely we'd see businesses out there moving the market to acquire a couple thousand dollars of bitcoin," White said on "Squawk Box."

Bitcoin prices skyrocketed all week and surged to all-time highs above $2,700 on Thursday, before pulling back some. Bitcoin resumed its march higher Friday morning.

"I think we're seeing continued growth in the fundamentals of the network," White said. "Every minute we see about a half million dollars moving the bitcoin network."

White said bitcoin and other cryptocurrencies are being viewed as "digital gold," a store of value rather than a payment system.

Bitcoin is a kind of token for which transactions are recorded in a secure accounting system called blockchain.

Over the past 12 months, bitcoin skyrocketed about 465 percent, raising some concerns about too much euphoria, similar to 1999 prior to the bursting of the dot-com bubble in the stock market.

While operating a digital currency exchange, Coinbase also acts as a platform where consumers and merchants can conduct transactions in bitcoin.