Bitcoin Price Sets New Record Amid Speculation
Bitcoin Price at Record High
Bitcoin price has set a new record high of $2,700 this week. Some say it will exceed $10,000 a Bitcoin! The current price represents a return of nearly 5000% in five years. It is almost unfathomable to see something that isn’t government controlled rise this quickly. It is unprecedented in economic history. There are many reasons for this surge, here’s why:
For some, it’s hard to understand Bitcoin’s recent bull run. It isn’t that hard to see as Bitcoin’s reputation has exceeded expectations. Government control of currencies is leading to chaos throughout the world primarily in India and Venezuela. Discussed below are the possible reasons contributing to Bitcoin’s boom:
Reasons for the Bitcoin Price Record
Jeffrey Gundlach, CEO of DoubleLine Capital, intrigued by the inflated value of this crypto currency, developed a theory around it. Gundlach linked the performance of the Bitcoin with the underperformance of Chinese markets. This has lead to an increase in alternative investments, such as Bitcoin and cryptocurrency. By comparing the performance of Bitcoin and China’s Shanghai Composite, a trend reveals itself. Over the past two months, where Bitcoin surged 200%, the Shanghai Composite dropped by 10%. That’s what’s called inverse proportionate. Furthermore, Chinese presence on exchanges has also become more prominent. Traders are more tolerant to digital currency in China and leading more to invest.
Rising Adoption of Cryptocurrency Worldwide
Further, rising adoption of this digital currency by countries worldwide is pushing the prices up. In April, the Japanese government formally recognized Bitcoin, encouraging demand and price to increas. Russia is another country moving towards legitimizing the currency, and assisting Bitcoin’s tarnished reputation. India’s Government is researching the further implementation of digital currency and recognition in the country. Another contribution to Bitcoin’s rising price is it’s increasing use in international money transfers.
Increasing Reputation of Bitcoin
Since Bitcoin’s inception, it has been fraught with public controversies. Aside from theft issues, there are still concerns about it’s legitimacy and security. However, increased security and advanced algorithms have strengthened the security of Bitcoin and other cryptocurrencies. Therefore, more investors have began to trust digital currencies.
Apart from these official reasons, some illegal reasons are also pushing Bitcoin’s prices up. One such major factor is Ransomware attacks, which demands ransom from the user to unscramble the data. Such attackers demand ransom to be paid in Bitcoin because it is hard to identify the network and track who received the payment. There have been reports that victims have paid millions of ransom through Bitcoin to save themselves from the ransomware attacks.
Investor Speculation Contributes, Too!
Further, recent data suggests that speculation in this currency is also a major driver of the price. Several experts – based on various data – concluded that Bitcoin is used less for payment and transaction than for speculative purpose.
After all this, Bitcoin is Still Hard to Predict
Bitcoin’s journey is far from over and will certainly be an interesting one to watch. Those in favor of the crypto currency are calling it the new digital economy, which is incorruptible, and a befitting successor of the conventional currencies, but the illicit use of this currency cannot be ignored. Hopefully, as the recognition of this crypto currency increases, there would be steps taken to make it safer for the investors.