What is the ruling on buying and selling cryptocurrencies that have recently appeared e.g. Bitcoin?

Shaykh Sulaymān Salīmullāh ar-Ruḥāylī

Cryptocurrency is a currency that belongs to individuals. It is created by individuals and so is not subject to any government regulation. It has no value in and of its self and thus is not based upon anything. It has no economic strength that gives it value nor an origin of some sort that it returns to e.g. gold, silver or the likes which would then give it value. Rather, its value is based on the fluctuation of the market.

There is no governing body overseeing it or a country that ensures the circulation of it as a currency. Meaning, it is possible that the owner may shut down the website and that would be the end of it. So as long as its affair is as we have mentioned, it is not permissible to use it. It has no value such that it can be bought or sold tangibly and there is no guarantee. Therefore, investing money in it is a waste of wealth. It is like a bubble, you become amazed by it the more it grows, but it may burst at any time, and of a surety it will burst.

Due to this, I see – and Allāh ﷻ knows best – that it is not permissible to trade with it. Yes, its thriving right now and its value has reached thousands of dollars after having no value. However, reality is the determining factor, and upon us is to rule with its impermissibility so long as its affair is as mentioned.