Bitcoin, the encrypted electronic currency, has finally crossed over $1,000 value which is a big achievement in more than three years this Monday. The currency was last recorded with a trading value of $1,021 as per CoiDesk data. This value has not been seen since November 2013. The hiked trading value also gives Bitcoin a market capital boosted value of $16bn.
Bitcoin is seen to rise steadily since the past few months and a number of factors are responsible for it. Some of the major ones are the uncertainty in geopolitical aspects, increased number of investors who are keen to trade in assets with a standard, and devaluation of Chinese currency Yuan.
Bobby Lee, BTC China’s chief executive officer stated that there is a confusion impact due to the zero interest rates which is why bitcoins are a healthy way of keeping track of cash without holding them physically. Dollars or any other currency in hand limits the purchasing power of the person.
China is a major trading centre for bitcoins and the recent devaluation in its currency with fear of capital controls have led to the recent hike in the trading value of the cryptocurrency. A number of other outcomes have also triggered this high rate. For instance, bitcoin’s value got a big rise after Donal Trump won the presidential elections in the United States. The appreciated value of bitcoin was at 137 percent in the last 12 months.
Another reason for the impact on the value was when a new rule was passed for mining bitcoins. The process involved solving of difficult mathematical puzzles which awarded them with bitcoins and process their transactions. The process is termed as “halving,” where the supply of bitcoins reduces. Nonetheless, experts stated that the market for bitcoins is gradually increasing in participation as well as quantity which will make its price rise even higher.
“The value of Uber in any city is directly dependent on the number of drivers and number of users, it’s not linear it’s exponential. The same is true of the value of bitcoin,” Lee said.