Bitcoin 20-Month High Going Past $500
The price of Bitcoin, at time of writing is $562 on BTC-E (you may check the price at BitcoinWisdom). The cryptocurrency has been rallying since Saturday, May 28, although the rally is slowing, the price is slowly moving upwards. 2016 has been a great year for Bitcoin thus far with the year-to-date the price of Bitcoin increasing by 25 percent.
Everyone is buzzing about Bitcoin’s recent surge past $500. I wouldn’t say we predicted it, but we always recommend buying Bitcoin (even a $1 worth). Most people like to hypothesize why Bitcoin is acting a certain way. It’s easy to point fingers, but harder yet to exact a reason. Fundamentally, the price is solely what people will pay for it. In the simplest sense, people are realizing the value of it and buying Bitcoin, causing sellers to raise their price on this action. It’s that simple!
It’s No Secret… Bitcoin is Valuable
Why Bitcoin Price is Surging
As it is the information age, many sources are looking at the data provided by exchanges to gain insight to this recent swing. Some of the most important factors are volume, which are somewhat accurate, despite Huobi and OKCoin self-reporting these statistics.
Chinese Buyers Stocking Up on Bitcoin
It isn’t difficult to pinpoint the exact nature of why Chinese cryptocurrency traders have recently been buying Bitcoin like no tomorrow. The Chinese Yuan was has been devalued many times this year, along with trouble in stock markets, and problems with government spending. China’s economy is demonstrating many signs of economic instability, which is causing the tech-saavy individuals to speculate on Bitcoin.
Chinese Economy Demonstrating Issues
China’s economy is approaching a breaking point, causing citizens to search for investments elsewhere. Bitcoin is one of those alternatives. This is a mixed-bag with neither news one way or another. One thing for sure, is that China had to devalue the Yuan to a more than five-year low against the US Dollar. This is most certainly a response to the US Dollar’s strength on international markets, due to a “strong economy”.
USA Federal Reserve Seeks to Raise Interest Rates
If there’s something Janet Yellen is great at, it’s telling everyone the Fed is going to increase interest rates. This has a massive effect on the global economy due to the world’s relative power to the US Dollar. This threat to raise interest rates is causing panic in China as their currency was already devalued months ago, and an interest hike would do even more damage. Janet Yellen’s imminent desire to raise interest rates is more than likely the primary reason for China buying Bitcoin.
Bitcoin is More Powerful than Ever
Regardless of the price of Bitcoin, which we believe reflects interest in it as an alternative currency/commodity, Bitcoin is here to stay. Time and time again, people have said Bitcoin has failed or died, but through it all, it still dominates the cryptocurrency marketplace. Bitcoin is inseparable from cryptocurrency, and vice versa. It is the global standard. It is only a matter of time before people really start to realize how important Bitcoin is, then we’ll truly see a rally.
We can’t predict how people will feel about Bitcoin from one moment to the next, but we know that when a government takes interest in purchasing Bitcoin, the price will soar beyond anyone’s’ expectations. Then again, this recent Bitcoin surge could be caused by another scam, like the price surge in November 2015. It may be a longshot, but it’s Bitcoin, you never know what’s going to happen next!