Hardly had we enjoyed the bitcoin breaking the 800$ barrier, as the price started approaching 900$ and now makes up $907.
The difference between the beginning and the end of 2016 is significant as the cryptocurrency began the year trading at $432. Experts admit that the price has more than doubled in value since January. According to forecasts, bitcoin is likely to continue growing as the rally shows no signs of stopping.
Many in bitcoin community link the price rise with the steady depreciation of the Chinese yuan, which has slid almost 7 percent this year. Statistics prove that most of bitcoin trading is done in China, thus any increase in demand from there results in significant price variation of the cryptocurrency.
The popularity of bitcoin in China is easy to explain. Bitcoin was created as a web-based digital currency that can enable transferring money across the globe quickly and anonymously. One of the main advantages of bitcoin is no need for a central authority, which makes the cryptocurrency so attractive for those wanting to get around capital controls, such as China’s.
Analysis of the year shows that the highest rise of bitcoin price coincided with the UK’s referendum vote. Bitcoin price nearly doubled to $780 in the first three weeks of June as investors and adopters drove demand for the cryptocurrency.
Finance Magnates informs that the overall market capitalization of the entire bitcoin blockchain sets a new all-time record – it is valued at just over $14.5 billion now thanks to this recent rise. This is still the overwhelming share of the entire market value of all blockchain assets and currencies in circulation, now worth just about $16.5 billion in total.
Within the recent week, as bitcoin started its upside movement, experts mentioned a number of political and economic factors that have had an impact on the cryptocurrency rise. The following events were enumerated as the most influential: the predicted fall of Chinese yuan; the failure of Italian Constitutional Reforms referendum which could result in Italy’s potential exit from the European Union; India’s demonetisation drive, followed by a similar decision taken by Venezuela.
Charles Hayter, founder of data analysis website Cryptocompare, especially emphasized demonetization in India and global political uncertainty as the key factors influencing the bitcoin growth.
“If that trend continues, bitcoin is a good thematic play on the fracturing of our global norms as a flight to safety,” he said.
Taking into account the above-mentioned factors plus the upcoming holiday season, we can observe bitcoin continuing the upward movement in the near future.