Driven by global political uncertainty and key developments within the cryptocurrency world, Bitcoin broke through the $1,900 mark for the first time on Friday.
According to Coindesk's bitcoin price index, the digital currency had moved as high as $1934.24 and was trading at around $1943.99 on Friday morning. A more than 6.8 percent rise from a week ago is marked by the current level.
Up more than $4 billion from Monday, bitcoin's market capitalization is now $31.75 billion.
From increased trading in Japan to debates over the future the bitcoin's underlying technology, a number of factors are responsible for bitcoin's rise.
According to data website CryptoCompare, accounting for around 48.6 percent of trading are Japanese yen and Korean won whose trading volumes have risen. The recently passed legislation that allowed retailers in Japan to begin accepting bitcoin as a legal currency is to be accorded to this rise.
Japan has been a big driver of bitcoin trade since then.
With the yen-bitcoin cross trading at 228,783.29 yen or $2058, Japanese yen bitcoin markets are also trading higher than U.S. dollar markets. This is higher than Coindesk's bitcoin price index. This is helping push prices higher given that the Japanese yen has the highest share of bitcoin trading at the moment.
"Arbitrage between the fiat pairs drags markets up or down in line with leading markets. At present, volumes on the KRW and JPY pairs dominate trading with a combined 48 percent market share," Charles Hayter, CEO of CryptoCompare, said.
For investors worried about the political instability and the performance of other asset classes, bitcoin has acted as a safe haven in the past.
While the political establishments in America and Brazil are facing potential scandals, U.S. equities saw a sell-off this week before rebounding earlier this week.
Potential inability of U.S. President Donald Trump to deliver on his promise on tax reform, deregulation, and infrastructure spending is a cause of concern for investors. There was a report that Trump allegedly asked ousted FBI Director James Comey to “let go” of the investigation into former national security advisor Michael Flynn on Tuesday.
Elsewhere, Brazilian President Michel Temer allegedly authorized bribes to silence a witness in a corruption scandal.
Analysts say that bitcoin is being supported by political turmoil in the world.
Debate about the underlying technology behind bitcoin known as the blockchain is going on behind the scenes in the cryptocurrency world. An unusually long time to process and come with high transaction fees is being taken by bitcoin at the moment.
Initiation of what is known as a "hard fork" is sought to be made by many in the community. The creation of two separate digital currencies would be the result.
But a "hard fork" might not be needed and this has buoyed investors was shown by an experiment with another cryptocurrency called Litecoin. There is a chance to speed up transactions and the backlog that has ensued, the idea shown with Litecoin showed the bitcoin community.
"The new developments on Litecoin, which is experimenting with alternative scaling solutions may offer a brighter future for bitcoin, and a longer-term price increase, if those similar solutions can be applied to its network," Aurélien Menant, founder and CEO of Gatecoin, a regulated bitcoin and ethereum token exchange based in Hong Kong, said.
(Source:www.cnbc.com)
According to Coindesk's bitcoin price index, the digital currency had moved as high as $1934.24 and was trading at around $1943.99 on Friday morning. A more than 6.8 percent rise from a week ago is marked by the current level.
Up more than $4 billion from Monday, bitcoin's market capitalization is now $31.75 billion.
From increased trading in Japan to debates over the future the bitcoin's underlying technology, a number of factors are responsible for bitcoin's rise.
According to data website CryptoCompare, accounting for around 48.6 percent of trading are Japanese yen and Korean won whose trading volumes have risen. The recently passed legislation that allowed retailers in Japan to begin accepting bitcoin as a legal currency is to be accorded to this rise.
Japan has been a big driver of bitcoin trade since then.
With the yen-bitcoin cross trading at 228,783.29 yen or $2058, Japanese yen bitcoin markets are also trading higher than U.S. dollar markets. This is higher than Coindesk's bitcoin price index. This is helping push prices higher given that the Japanese yen has the highest share of bitcoin trading at the moment.
"Arbitrage between the fiat pairs drags markets up or down in line with leading markets. At present, volumes on the KRW and JPY pairs dominate trading with a combined 48 percent market share," Charles Hayter, CEO of CryptoCompare, said.
For investors worried about the political instability and the performance of other asset classes, bitcoin has acted as a safe haven in the past.
While the political establishments in America and Brazil are facing potential scandals, U.S. equities saw a sell-off this week before rebounding earlier this week.
Potential inability of U.S. President Donald Trump to deliver on his promise on tax reform, deregulation, and infrastructure spending is a cause of concern for investors. There was a report that Trump allegedly asked ousted FBI Director James Comey to “let go” of the investigation into former national security advisor Michael Flynn on Tuesday.
Elsewhere, Brazilian President Michel Temer allegedly authorized bribes to silence a witness in a corruption scandal.
Analysts say that bitcoin is being supported by political turmoil in the world.
Debate about the underlying technology behind bitcoin known as the blockchain is going on behind the scenes in the cryptocurrency world. An unusually long time to process and come with high transaction fees is being taken by bitcoin at the moment.
Initiation of what is known as a "hard fork" is sought to be made by many in the community. The creation of two separate digital currencies would be the result.
But a "hard fork" might not be needed and this has buoyed investors was shown by an experiment with another cryptocurrency called Litecoin. There is a chance to speed up transactions and the backlog that has ensued, the idea shown with Litecoin showed the bitcoin community.
"The new developments on Litecoin, which is experimenting with alternative scaling solutions may offer a brighter future for bitcoin, and a longer-term price increase, if those similar solutions can be applied to its network," Aurélien Menant, founder and CEO of Gatecoin, a regulated bitcoin and ethereum token exchange based in Hong Kong, said.
(Source:www.cnbc.com)
