On Monday we reported that Bitcoin price almost reached $550 during the weekend, but then it dropped to $535 and remained stable. Similarly, in the course of the last two days the price fluctuated slightly, but today it is again at $530 without any significant shakeups.
Market experts and Bitcoin enthusiasts are still somewhat baffled by the huge surge that happened in the past week and they have spent this past few days analysing the causes of the major price increase of this most popular cryptocurrency. The increased demand for Bitcoins on the Asian market is seen as one of the main reasons for the price rise.
Increased Demand for Bitcoins in China Drove the Price up
Experts agree that the growing demand for Bitcoins, fuelled by the worries of Chinese investors that the Yuan may weaken further is one of the primary reasons for the recent price increase of the Bitcoin. However, there are few other reasons that have also been identified as contributing factors for the current situation.
It has been reported that the Bitcoin trade in Chance rose more than threefold since Friday. Apparently, Bitcoin became interesting as many Chinese savers who have all assets tied to the Yuan fear that a further devaluation of the Chinese currency is immanent. Yesterday the price of the Yuan dropped to a lowest point in more than 4 months. The fact that the Bitcoin isn’t regulated by a central authority makes it particularly appealing for Chinese investors.
Still, investors and potential Bitcoin buyers are well aware that in less than two months the amount of new Bitcoins that are ‘issued’ on a daily basis will be cut in half. You don’t need to be a leading economist to figure out that a decrease in supply will cause an increase in demand and subsequently to an increase in price, which eventually happened this past week.
Last but not least, it is becoming a lot safer and easier to use Bitcoin nowadays. Only a month ago, Blockchain released a network that enables people to make much faster Bitcoin transactions. The overall reputation of the Bitcoin as a currency has been improved and thus it is not surprising that a lot more people are willing to invest in it.
Price Stabilisation, Slow Growth Expected
In the past 12 hours the price has not seen any rapid changes and it has been fluctuating between $520 and $530. It has reached above $531 only at one point. In the upcoming few days we don’t expect serious price fluctuations. Some figures indicate that the price might decrease in the upcoming period, before it rises again. The fact that the breach between the averages is reducing is one indicator that we can expect a decrease. It could even go below $500 at a certain point, before soaring again. On the other hand, the traded volume in the past 24 hours was $133,969,000 which is a significant increase compared to the last few days.
All things considered, the price will likely grow in the upcoming period, at least mid-term. There might be certain short-term fluctuations though. Recent polls show that the public opinion in the UK is slowly shifting toward Brexit. This could create further stirrups, as people will be not inclined towards investing in a cryptocurrency at times when there’s an economic and political instability.