Guest post. The virtual currency Bitcoin is currently celebrating a suspicious comeback. On Wednesday, November 4, it surged 25% and has reached the $500 mark for the first time since summer 2014. Just two months ago, the currency has been valued at about $200.
During the last three days, the currency has appreciated by 40%. In October, it has gone up almost 70%. Such a fast price increase is most likely not sustainable and indicates a bubble. Investors should watch out.
China’s capital restrictions cause capital flight; European regulators made Bitcoin trade more attractive by imposing tax-exemptions
There are a variety of factors affecting Bitcoin prices. Experts say, that the Bitcoin will benefit from technological developments in the next ten years. Nowadays, for example, more banks use blockchain technology, which is also used for Bitcoin trading. However, that is a long-term trend and certainly not enough to explain price increases of more than 100% in just two months.
Right now, the economic crisis in China seems to be the most significant driver. After the Chinese economy got hit in August and the