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article imageBitcoin price tops $8,000 on one major exchange Friday

By Ken Hanly     Nov 17, 2017 in Technology
On the cryptocurrency exchange Bitfinex bitcoin rose to a new all-time high of $8,040 on Friday morning briefly before dropping back below $8,000.
Only a few days ago the price of bitcoin had dropped below $6,000. Coindesk's chart which takes into account the price at several exchanges put the peak at just below $8,000 at $7,965. A Fortune article also puts the weighted average of prices just under $8,000.
As I write this on Friday evening, coindesk lists the price at $7,502 but that can change quickly due to the extreme volatility of the price of bitcoin.
Three factors influencing bitcoin's price move upward
Since US derivatives exchange operator CME has announced that it would add bitcoin futures contracts to its offerings, analysts have been awaiting Wall Street's first entry into the cryptocurrency market. It is expected that institutional investors are eying the crypto market.
Wall Street has become bullish on some publicly-traded companies that have either entered bitcoin or blockchain space. This includes the payment processor Square. Its shares rose after it rolled out a bitcoin pilot program that involves a limited number of those who use it.
Another factor is that there was a successful use of the Lightning Network to carry out the first off-chain swap. Cryptocoinnews claims: "Accomplished using lightning network technology, developers at Lightning Labs traded testnet bitcoin for testnet litecoin trustlessly and without leaving a record of the transaction in either blockchain. Once the lightning network reaches mainnet implementation, this feature will enable the creation of decentralized cryptocurrency exchanges."
A final factor may be that a minority of bitcoin miners are still signaling for a doubling of the block size of bitcoin in spite of the fact that the most prominent backers of the change called it off.
Spencer Bogart , head of research at Blockchain Capital said he believed "some capital is rotating out of other crypto-assets and into bitcoin inorder to make sure they receive coins on both sides of the fork" if the hard fork did execute as planned. However, so far the fork has not happened.
Not all bitcoin trades involve speculation
About a third of the customer's at La Maison du Bitcoin in Paris are not speculating. They are sending digital money back home to Africa.
Manuel Valente, co-founder of La Maison said: “In many countries in Africa, there are far more cellphones than bank accounts. For bitcoin, all you need is a phone.”
In places such as Zimbabwe and others facing political turmoil residents want to transfer money without dealing with banks and without using local currency whose value is often eaten up by inflation. Also, bitcoin can be transferred anonymously. As confidence in banking institutions declines, bitcoin looks to be a safe haven just as gold is.
Andrew Milne, chief investment officer of Altana Digital Currency Fund said: “Bitcoin is a safe haven for people around the world who don’t trust their governments. There are many countries where people are looking for an asset that isn’t vulnerable to banks blowing themselves up.’’
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