In case you haven’t noticed, Bitcoin has risen to extraordinary highs in the last year. Once viewed as a volatile and uncertain asset, it soared throughout much of 2016 and into this year, reaching price points around $3000 per Bitcoin. It’s not a guarantee that this indicates sustained performance, so if you’re looking into investing, be mindful. Some have started to discuss the idea of the Bitcoin bubble bursting, and there seem to be intelligent voices on both sides. Some people are predicting continued growth and lucrative prices in the years ahead while others see Bitcoin crashing.
Whatever the case is looking forward, there’s no denying Bitcoin’s recent growth. The interesting part is figuring out why the cryptocurrency has been so strong. This is always a point of interest for an analyst or investor looking to understand a commodity’s movements, so let’s take a look at some of the changes that could be factoring in.
Far East Acceptance
Earlier this year, the Japanese government introduced changes to legislation that recognized Bitcoin as a payment method. That might not seem like a big deal at a glance, but in the past we’ve seen Asian countries impose strict regulations on cryptocurrencies. It stands to reason that as government regulators make these currencies easier to use, more people will try to acquire and use them. Thus, changes in Japan (and some similar changes in China) have gotten investors and consumers alike to take a more bullish outlook on Bitcoin.
Every time a major business or industry embraces Bitcoin, the currency becomes that much more legitimate. For a couple of years, adoption of cryptocurrency usage has been somewhat gradual. We’ve seen online shops and in-person merchants coming around to accepting it, but not in any kind of defining wave. Late last year we saw something a little more solid, as some of the first online casinos started to embrace the use of Bitcoin. While that may seem like a niche development it’s just the kind of thing a savvy investor might look for. Online casinos involve millions of players, and they’re now able to use Bitcoin to play their games.
Maybe the biggest development is that as Bitcoin has proven its resilience, those who are investing significant sums in its growth have grown more comfortable. Cryptocurrency had already received about $35 billion in investments as of early May 2017, and that reflects a great deal of confidence from people who have the money to help drive the market. Of course, this is something of a chicken vs. egg issue. Bitcoin growth encourages investor activity, which in turn facilitates Bitcoin growth, and so on. But figuring all that out is unnecessary. The point is that a lot of money is still being poured into this asset and others like it.
Again, none of this necessarily means that Bitcoin will continue to grow at the rate we’ve seen. There are plenty of people who believe it may actually regress, just as others think it’s only just getting started. If you’ve been curious about why Bitcoin has been in the news lately, these have been some of the big factors behind its growth.