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Bitcoin world domination ‘a bumpy ride’: CEO

Wednesday, 20 Nov 2013 | 6:39 PM ET
Bitcoin world domination 'a bumpy ride': CEO
Wednesday, 20 Nov 2013 | 5:45 PM ET
The cryptocurrency known as bitcoin has a lot of potential and a long way to go, Bobby Lee, co-founder and CEO of BTC China, says.

Bitcoin has a lot of potential and a long way to go, Bobby Lee, co-founder and CEO of BTC China, said Wednesday.

"In terms of its value, I wouldn't worry too much about how many percent it's been up year to date because ... if you look at the five-year history of bitcoin, it literally started at zero," he said.

Bitcoin's value in U.S. dollar terms has been up more than 4,100 percent year to date. Bitcoin ended the day at $542.40.

On CNBC's "Fast Money," Lee said that bitcoin had a big hill to climb.

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"For it to be a true worldwide asset class, it would have to have a very, very large circulation value to account for the global population," he said.

Lee noted that gold, with a 170,000 tons in circulation, equals less than 1 ounce per person on earth.

(Read more: Meet the Subway franchise owner who accepts bitcoin)

"If you compare it to that, bitcoin is a fraction of what it could become in terms of a global asset class," he said. "As we get to a future utopian society, if bitcoin were really to take hold in this society, then the total circulation value would have to be in the trillions, and to get from zero to trillions is going to be a bumpy ride."

Lee admitted that there was little to stop someone from creating another digital currency but argued that the open-source bitcoin was "already way in the lead."

(Read more: It doesn't jingle, but bitcoin value soars)

Regulation would likely be needed for bitcoin exchanges, he added, to prevent such instances such as the alleged disappearance of an estimated $4 million worth of bitcoin from a Chinese exchange.

"That issue is with the exchange," Lee said. "You know, it's probably run by some unscrupulous people who ran away or disappeared so far. That's why bitcoin exchanges probably need to be regulated, so that it doesn't happen again in the future."

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro. CNBC's Michael Newberg contributed reporting to this article. Follow him on Twitter: @MikeNewberg.

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