After it ended up being the best-performing currency of 2016, for the first time in three years the digital currency Bitcoin has seen its value exceed
After it ended up being the best-performing currency of 2016, for the first time in three years the digital currency Bitcoin has seen its value exceed the amount of $1,000 (£815).
According to CoinDesk data it traded up to $1,029 on Tuesday (3th of January), which happened to be the very first say of trading in the New Year.
As well known, Bitcoin is a virtual currency, meaning it is not tied to any physical assets and no central bank is in control of it. In point of fact, it relies on web-based transactions handled by thousands and thousands of computers, and along with the luxury of moving quickly money across the globe, Bitcoin also provides anonymity. However, when it comes to exchange rate it makes no exception and like all fiat currencies its worth can only be determined by how much exactly people are ready to exchange it for.
The value of Bitcoin has been unstable ever since its first launch in 2009, and many experts have questioned whether the crypto currency will last. It did.
As David Moskowitz, the founder of Coin Republic, a Singapore-based Bitcoin brokerage, said: “At some point there will be a correction but my outlook is still very positive as Bitcoin has shown its resilience. It’s been declared dead 115 times and is still the best way to send value directly from person to person without anyone being able to prevent that transfer.”
The last time Bitcoin was trading above $1000 was in late 2013 after numerous debt crises in Europe raised doubt on the value of the many fiat currencies. But then, a few months later it came crashing down to under 400$ when the Mt. Gox case occurred.
In contrast, in 2016 made it to the world’s best-performing currency increasing its value by 125% and blowing its central bank-issued fellows away.
Specialists in economic analysis conclude that the jump (in value) could be attributed to
the outstanding demand in China. Due to the decision of the Chinese government to put into effect more capital controls on the yuan currency and to limit the amount of money leaving the country, it has been significantly harder for wealthy citizens to withdraw their assets abroad. Which led to the usage of Bitcoins in order to move that cash.
“The growing war on cash, and capital controls, is making Bitcoin look like a viable, if high-risk, alternative,” said Paul Gordon, a board member of the UK Digital Currency Association.
Another speculation is that the attempt of combating money laundering by eliminating high-denomination bills in India also had its consequences.
Mr. Moskowitz, believes some investors now see the currency as a haven asset.
“The run-up since November could be due to Indian demonetization followed by Venezuela capital controls and rumors of similar actions in more countries,” he told the BBC.
And according to CNN even the Brexit and the recent election of Donald Trump on the US presidential elections may have impact on the Bitcoin’s climb.
The estimated worth of the crypto currency is now 16 billion dollars with 12.5 bitcoins adding every 10 minutes. The experts predict continuation of its recent spike: “As asserted by analysts, 2017 is expected to be a banner year, one that could finally lead the price to pass its all-time high of $1,216.7 set in 2013,” CoinDesk said.