It’s official! Bitcoin price is at an all-time high, surpassing the previous peak in 2014 right before Mt Gox’ collapse. The increasing demand for the popular digital currency has placed its total market capitalization at over $ 19 billion.
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Bitcoin price has been cutting through resistance like a hot knife through butter. the increasing price is brought about by demand, which is expected to stay if people continue with their current buying trend. According to reports, people are investing in bitcoin as a safe haven asset. Given the economic uncertainties in various countries, those who are buying are doing so with an intention of holding on to it which has in turn resulted in demand overshooting supply.
At the current rate, bitcoin may as well prove Vinny Lingham’s prediction right by reaching $3000 by the end of this year. Few publications believe that the increasing value is driven by strengthening US dollar and tightening currency and capital controls by many countries. In all these, Asian nations have played a huge role as well. The Bitcoin/Chinese yuan pair continues to dominate the cryptocurrency market due to the not so impressive performance of Chinese economy in the past couple of years. The Indian government’s decision to demonetize certain high-value currency notes also had a considerable impact on the demand for cryptocurrency in the country. With more countries considering actions similar to that of India, Bitcoin may soon find new takers.
While China leads the way when it comes to bitcoin trading, African nations are increasingly adopting Bitcoin-based payment and money transfer solutions at a rapid pace, which is also contributing towards increasing demand. Even Latin American countries like Venezuela have made it to the list as bolivar’s value continues to decline amid increasing inflation rates.
European nations are closely following and in the coming days, demand from the continent can be expected to rise as Britain moves towards Brexit and weakened Italian banking system.
As people continue to hoard bitcoin, there is always a chance of a sudden influx of cryptocurrency back into the market, provided a significant number of investors decide to liquidate their holdings. If such a situation arises, then bitcoin price may fall considerably, only to gather steam later on. There are no indications of such a thing happening at the moment, making it hard to predict the fall. In other words, bitcoin is rising on borrowed time. If it runs out, bitcoin price may fall by $50-$150 and stabilize at around $950-$1000.
Ref: The Australian | Image: Shutterstock