Bitcoin has turned out to be the most sought after asset of this year. As 2016 comes to an end, the digital currency has broken all barriers to reach an all-time high in its overall market capitalization.
Since the past five months, Bitcoin price has been constantly on the rise to reach $865 this week — the highest it has ever reached, since the Mt Gox fiasco. The cryptocurrency’s performance, driven by various factors has been overwhelming for most Bitcoin users. There are speculations that Bitcoin price is being pushed upwards by increased activity in countries with troubled economies and monetary systems.
The reaction towards Chinese yuan’s performance has been mixed at best. The Chinese Bitcoin market continues to be one of the major driving forces amid the looming threat of further devaluation. On the other hand, many countries trying to follow India’s example of withdrawing higher denomination banknotes from circulation has created an atmosphere of panic.
When India announced its move to demonetize existing INR 500 and INR 1000 currency notes, the demand for Bitcoin increased. As Indians still wait in front of cashless ATMs and overcrowded banks to get their hands on the elusive valid currency notes, Pakistan, Venezuela, and even Australia have started considering similar actions in their respective countries.
The underperforming European economy is another factor which makes Bitcoin look really attractive as an alternative to conventional financial assets. As the global geopolitical and economic scenario continues to drive people towards Bitcoin, the holiday season following Christmas has been doing its part as well.
Bitcoin continues to benefit from its strengths, which include decentralized nature of the currency and its limited supply. The earlier prediction of Bitcoin price crossing $850 has come much sooner than later as expected. In the current scenario, Bitcoin is expected to further strengthen its position in the coming days before the market returns to normalcy.
Bitcoin by design is created to offer a better option to people as the global economy continues to deteriorate. The best examples are the governments and their move towards cashless, credit-based economy that forces people to spend the money which they do not have, eventually riddling the whole economic system in debt. With no upcoming policy changes in the near future, Bitcoin will continue to be the safe haven.
In such a situation, it is imperative for the Bitcoin developer community to pull their act together and work on scaling the cryptocurrency ecosystem. If they don’t bury their differences and act soon, everything the digital currency has achieved so far will be for nothing.