Bitcoin hasn’t been seeing so much success since its last boom time around 2013 and 2014. It reached $1,000 in November 2013 but had plummeted dramatically by mid-2014. Prices fell below $300 and languished below $500 for several months.
More recently, the situation has started to look up again. By the end of 2016, Bitcoin’s value had recovered to $900. After suffering from a series of massive swings in value, the cryptocurrency today reached an all-time high of over $2,130.69, giving it a market capital of around $35.9 billion. Bitcoin has climbed over 125% in the first five months of the year.
The resurgence of the briefly trouble-hit currency has been attributed to a combination of several different factors. In particular, investors have suggested that the relaxation of regulations in China and Japan has helped Bitcoin to rise. Foreign investors in the two countries have been quick to buy coins, increasing demand.
The new rules effectively make Bitcoin a recognised currency and part of the banking system. It’s now simpler and less risky to buy and trade Bitcoins in the regions, inevitably leading to greater activity and a rise in price. The difference in value of Bitcoins listed on Chinese and U.S. exchanges has narrowed considerably.
Cryptocurrencies in general are also on the rise, another element which has contributed to Bitcoin’s reclaimed fame. Previously treated as the reserve of hobbyists, criminals and computer enthusiasts, the concept of digital money has gained wide acceptance in the past few years. The high-level concept of blockchain technology is highly sought after and is being acquired by organisations and businesses across the world.
Digital currencies have demonstrated that they can be a more reliable asset than real cash. Although Bitcoin’s volatility has shown it’s not an entirely suitable cash replacement, it has seen use as an alternative to traditional assets such as gold. Now that prices are on the rise, this will be a more attractive scenario, potentially seeing Bitcoin climb higher over the coming months.
If one thing’s for sure, Bitcoin isn’t predictable though. Analysts have noted that the exact causes of changes in value are hard to pinpoint. The currency could soon plummet downwards again and leave investors out of pocket. The past evidence suggests it would eventually recover though, affirming its use as a failsafe asset for when real cash is in short supply.
Bitcoin’s also being buoyed by the success of rival cryptocurrencies like Ethereum and Ripple that have generally outperformed it this year. Ripple has risen in value by over 1000% in a single month, giving it a strong second-place position behind Bitcoin. With Bitcoin no longer the only serious cryptocurrency, it’s facing competition and further increased demand. Many of the newer alternatives are most easily purchased using Bitcoins.
