A few months ago Bitcoin exchange price is too low around 500 to 600 dollars for each coin. If you check the previous Bitcoin charts the rates of the exchange is getting high but at normal speed. Crossing the symbolic threshold of $ 1,100, bitcoin shows that it has become the largest virtual currency. This rise comes mainly from China where transactions have accelerated significantly. But this tension on the courts already shows its limits.
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The Reason Behind the Rising of Bitcoin Exchange Rates
Bitcoin crossed the threshold of $ 1,100 on the Bitcoin Price Index last night, which calculates the average price of bitcoin on the various trading platforms before falling back to around $ 950 (at 4 pm). The virtual currency has been trending upwards of 83% since last June. This is the second time it has crossed this threshold since it was created in 2009. The previous time, at Christmas 2013, it had reached $ 1,165, a record that preceded the bursting of the bubble. It is hard to predict today whether this crossing of thresholds is the prelude to the bursting of a new bubble or the sign of a lasting appreciation of virtual money.
For Vinny Lingham, expert and boss of the American start-up Civic, specializing in the protection of digital identity, the strengthening of the dollar and the uncertainty in emerging markets about the policies of the future Trump administration are important factors. He predicts that the bitcoin will trade against $ 20,000 at the end of 2017. “Bitcoin reacts like a safe haven,” he says.
Strong Chinese demand
The bulk of trade comes from China, where purchases have been growing strongly for several months. According to the site bitcoinity.org, the three main Chinese platforms (BTC China, Okcoin, and Huobi) which exchange in yuan, represent 98% of global bitcoin exchanges. “It’s all about the downturn in the yuan, people want to turn to strong assets, hard currencies, and bitcoin is attractive because of its resilience,” says Bobby Lee, co-founder and CEO of BTC China, the biggest global platform for buying or selling bitcoins. This bulimia of Chinese investments in bitcoin is also explained by a desire to place money outside China. This tension on prices could, however, have a limited duration in case of the intervention of the Chinese authorities.
Bitcoin, unlike conventional currencies such as the euro, the dollar, the yen or the yuan, is regulated by no central bank and is not guaranteed by any government. It is regulated by a blockchain system that limits to 21 million units the number of bitcoins of which about three quarters have already been created. There is therefore a phenomenon of scarcity that could theoretically lead to higher prices. Still bitcoin is worth $ 18 billion, making it the first virtual currency by far, but it does not represent much compared to traditional currencies.