The beginning of June saw the Bitcoin price rising to more than $2900. Based on the data provided by Bitcoincharts, the price was double of its value in May and an almost 500 percent increase over the last 5 years of its existence.
The surprising factor was that the price surge was not because of an increase in Bitcoin trading. And given that Bitcoin is not any closer to entertaining mainstream acceptance, its soaring value came to many as a puzzle. The price growth left many investors flustered as to whether they should invest in cryptocurrency at that moment or whether they should wait for the price to fall.
Many drew comparisons to the 2000 Tech Bubble, before the industry was hit and stooped to an all time low, referring to the situation at hand as the ‘Bitcoin Bubble.’
However, cryptocurrency experts believe that this price rally is just the beginning of new era of electronic cash transfer and increasing adoption and stability of the same is on it’s way.
Garrick Hileman, a Bitcoin expert at the Cambridge Center for Alternative Finance said that surveys show most users buying and selling bitcoin for speculative purposes rather than to buy things or send cash to other people.
The speculations over the price of Bitcoin brought to the notice of cryptocurrency experts, the increasing demand of the same on Asian countries, and that has been the primary reason for Bitcoins astounding growth.
A Culture of (Bit)Coins
A number of reasons have pushed bitcoin to record highs, such as legalization of the currency in Japan for payments, boosted interest from Korea, as well as the conclusion of a debate about the future of the cryptocurrency. The former two along with speculations regarding the Chinese Government have been the major factors for the Bitcoin Boom.
Since the Japanese government formally recognized the cryptocurrency in April 2017, Bitcoin was on the receiving end of greater legitimacy in Asia’s richest major economy. There’s been steady growth of international money-transfer services that use Bitcoin to move cash from one country to another.
Japan is seeing a marked increase in the number of brick-and-mortar stores accepting bitcoin. ResuPress, a Tokyo-based bitcoin exchange operator revealed that September 2016 saw 2,500 stores across Japan accepting BTC as a method of payment. This was four times the number of stores that did so in 2015.
Korea, not be left behind, is also seeing it’s share of miners and investors on the rise. Infact, May 2017 saw South Korean Bitcoin traders face asking prices of $4,500 as the virtual currency’s price continued to surge.
Vox.com reported that “The most dramatic illustration of this is the fact that the value of Bitcoin reached a high of 5 million won in South Korea on May 25, the equivalent of about $4,500 and far higher than the US price of around $2,700 at the time. The price of Bitcoin in Japanese yen was been about $300 higher, on average, than the price in US dollars at the time”
And though, the yen-dollar value spread has narrowed down significantly, one between Japan and South Korea continues to be of intense interest.
July 1st saw the Japanese Government exempting Bitcoin from the 8% tax consumption. This will prompt Japanese businesses to give the technology another look, giving it a further sense of momentum.
The CEO of the largest Japanese Bitcoin Exchange by volume, Bitflyer, Yuzo Kano believes that this tax abolition will have 3 major effects on the cryptocurrency market – Cheaper abroad bitcoin transfers, positive consideration for bitcoin as a real currency and not just a legal form of payment and accesss to global markets for bitcoin exchanges.
CEO of Gatecoin, a regulated crytocurrency exchange Aurelien Menant in an interview with CNBC said that
“There is a lot of fresh liquidity flowing into bitcoin, thanks to a surge in interest among investors in Asia, notably Japan and Korea, coupled with a resolution to the scaling debate. I would not be surprised to see the bitcoin price doubling again to around $6000 by the end of the year,”
With Bitcoin money exchange services catching up and providing a fresher, better alternative to existing money transfer services which are both slow and expensive, and ransomwares like WannaCry also throwing light onto Bitcoin, it is increasingly becoming popular amongst todays generation that enjoys walking on coals. Though Bitcoin is the riskiest investment one can make, the returns one receives are almost unparalleled by any altcoin.
The Speculative Mania gave Bitcoin enough attention to drive it to new heights, and Bitcoin as far as one can see, is here to stay and to rise.