Bitcoin started the year memorable, keeping up a strong price rally ever since the last year. Most price indices and exchanges show a $1000 mark at the first day of the year and at this time of writing, Coindesk BPI shows Bitcoin price at $1045.34. It started at a less than $500 price at the start of 2016 and rose at a rate equivalent to a 3-year increase at the start of 2017. This event gained Bitcoin an extended mainstream media attention in Belgium, Netherlands, and South Korea.
In this article, we will be providing 5 probable reasons why Bitcoin hit the $1000 mark and why it keeps on increasing its value this year.
I. Global Economic instability
According to Cryptocoinsnews, analysts from a major Dutch daily newspaper company, De Telegraff, point out today’s actual instability and uncertainty of the worldwide economy which led to the rise of Bitcoin’s demand.
II. Strong demand from China
De Telegraff researchers also stated China’s trading volumes as a huge contributor to Bitcoin’s sustained price increases. They mentioned Bitcoin’s popularity is heightened by Chinese investors, traders and consumers buying Bitcoin to get away from Chinese Yuan’s devaluation and from strict capital controls and regulations by the government in China.
III. Fed increased rates
Vinny Lingham, founder of Civic gave an important consideration to the effect of increased interest rates for Bitcoin in the Federal Reserve. The rate increase in December 2016 is to cope with the rise in inflation rates and maintain its economy’s stability. Thus, many people are opting to invest or save money on Bitcoin.
IV. More Demand Upsurge
South Korea, while recovering from an economic stability with its President’s bribery issues and serious offenses, many people in the country are worried about South Korean Won’s devaluing when Federal Reserve increases its interest rates.
With fiat currencies such as Chinese Yuan and South Korean Won depending on US dollar’s performance, continued devaluing of these currencies added to the upsurge of China and South Korea’s demand for Bitcoin as investors see it as an alternative to their local currency.
V. Increased exposure
Bitcoin is now getting more and more popular as mainstream media is showing more interest in its performance, thus, eventually exposing it to more millions of people. Due to economic issues, researchers and interest to the cryptocurrency, mainstream media in Belgium, Netherlands and South Korea is giving Bitcoin an extensive coverage. If the price of Bitcoin will continue to rise this year, there will be more of its exposure in the large mass news media and will eventually aid to its increase in adoption.
In conclusion, there is no doubt that Bitcoin will continue to rise in months and even in years to come. Comparing to its last surge in the year 2013, where it increased tenfold in just 2 months, more people rushed to invest in Bitcoin and this year the same will also be more likely to happen.
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