Bitcoin is having a great year so far. At the beginning of 2017, the cryptocurrency’s price was hovering around $1000 before falling as low as $760. But since then, Bitcoin price has recovered and crossed the $1000 mark yet again.
Like any other tradable asset, Bitcoin price is also bound to speculation. At the same time, various other factors drive the demand and supply of the digital currency. Until now, the increased trade volumes in the Chinese market was one of the driving factors behind Bitcoin’s price. However, the recent crackdown on cryptocurrency exchanges by the country’s central bank has led to a significant decrease in Bitcoin trades in the Chinese market.
With almost all leading Chinese cryptocurrency exchanges freezing Bitcoin withdrawals, the number of people trading on these platforms has reduced, resulting in a fall in the cryptocurrency’s supply to meet the international market’s demands. This, in turn, is influencing the rise in Bitcoin value.
The supply-demand situation is further worsened by the hopes of Bitcoin ETF’s approval on March 11, 2017. People, both existing cryptocurrency community members, and other investors are increasingly buying into the digital currency as Bitcoin’s price is expected to increase even further. According to few media outlets, Bitcoin ETF’s approval will see Bitcoin’s price rising to $3,200 — more than double the current price.
On the other hand, there are skeptical views about the approval process, and a significant portion of the Bitcoin community believe that the chances of approval are slim. Meanwhile, there is an increased demand for Bitcoin in Latin American and African nations as well. The rise in Bitcoin usage among the people in Venezuela and Nigeria has already been reported in cryptocurrency and mainstream news.
Another active market for Bitcoin lies in Japan. The Japanese government has already imparted Bitcoin with the status of a legal tender. The relevant regulations are expected to enter into effect later this year. The digital currency’s legal status in the country has also boosted cryptocurrency- related activity in Japan.
All these things put together shows that the rising Bitcoin price is due to multiple factors and any effects, positive or negative will become visible by mid-march.
Ref: Seeking Alpha | Image: NewsBTC