What Are Those Reasons For Bitcoin’s Rising Price

The fluctuation in Bitcoin pricing is keenly observed by financial experts. What are the reasons underlying this price rise?

The Discussion On Bitcoin Pricing

It had to be seen as the price of Bitcoin went up by over 210% during the past year as trading from about $450 in mid-2016 to record-breaking levels of $ 1,400 in May 2017. Thereby in the eight years since its founding, the Bitcoin has braved skepticism rejection and experienced volatility to the present day when its slowly being recognized by governments and even dubbed as an emerging asset class. 

As Bitcoin was created in the wake of 2008 global financial crisis operating outside of central governments, banks, and financial institutions, there has been over these years, bitcoin’s framework challenging regulators as most of them struggled to find a way to bring it under control leading some countries to ban it or make it illegal while some others remained observant and that is how the rest worked out those ways to tax and regulate its operations. Thereby it was, however, the uncertainty angle remaining insight as there still isn’t a very clear stance by many countries with several nations coming out in support of the cryptocurrency. 

Where Do The Global Nations Stand In Convincing Bitcoin Investments?

It was here that while Japan being recently recognized Bitcoin as a legal method of payment as also it continues to be treated as an asset as it is not a currency. Thereby in India, the Department of Economic Affairs, Ministry of Finance has constituted a committee examining the existing framework around virtual currencies as the committee not only examines the present status of VCs in India and around the globe but also suggests measures to deal with consumer protection and money laundering. This is where the committee will be submitting its report. 

Moving on at the same time, Russia as a staunch opponent of cryptocurrencies has taken a U-turn where in an interview to Bloomberg, the Russian Deputy Finance Minister Alexey Moiseev said that in an attempt to combat money laundering the Russian authorities hope to legalize Bitcoin and other cryptocurrencies as a financial instrument in 2018, further stating that the state needs to know who at every moment has stood on both sides of the financial chain and in case of a transaction, the people who facilitate should understand that from whom they bought and also to whom they were selling it just like with bank operations. It is also here that the Bangko Sentral ng Philipinas, the central bank of the Republic of the Philippines has issued a guideline recognizing Bitcoin as a legal payment method.

It is observed thereby that the legitimacy of Bitcoin’s existence doesn’t just come in direct ways: approvals of investment products based on Bitcoin indicate what regulators think the reason why Bitcoin prices tanked to about $ 900 levels from $ 1300 as the SEC disapproved of the Bitcoin ETF by Cameron and Tyler Winklevoss. It was then nevertheless that the SEC was positive for the future as the document read that the commission notes that Bitcoin is still in the relatively early stages of its development and that overtime regulated Bitcoin-related markets of significant size may develop as should such markets develop, the commission should necessarily consider whether a Bitcoin ETF would base on the facts and circumstances then presented be consistent with the requirements of the Exchange Act. It is interestingly noted that SEC has now granted a request for a review of its decision of disapproval. 

What More To Say About Bitcoin Investment?

Therefore it is here that the efforts to bring Bitcoin linked products are a direct result of the growing demand as more and more people are looking to invest in cryptocurrencies and although there are products such as Grayscale Bitcoin Investment Trust that is traded OTC and exchange-traded funds from ARK Investment Management offering limited exposure and opportunity to invest in bitcoins. Thereby the former is meant only for accredited investors as the latter have a very small holding in Bitcoins.

On this occasion, there is an option to invest for the long term in bitcoins for retirement by opening a self-directed Bitcoin IRA account approved by the Internal Revenue Service with the scheme being welcomed warmly and has gathered around $ 10 million till date reflecting the underlying confidence of investors.

By now Bitcoin startups have attracted huge investments in Bitcoin and blockchain with total funding of $ 550 million in 2016 as per a report and additionally, many prominent investors have been raising direct stakes in Bitcoin suggesting an optimistic future of cryptocurrencies as the billionaire Mike Novogratz recently revealed that he holds10% of his net worth in cryptocurrencies like Bitcoin and Ethereum, and now predicts Bitcoin to go past $ 2,000

The Bottom Line

Apart from all this while the above seems to be the most evident reasons as there are many geopolitical and economic reasons lying underneath it includes Trump’s presidency rising debt levels is some of the prominent economies around the world, with a rate hike by the Federal Reserve and to some extent exhausted monetary policy options available with central banks. Thereby a report by Saxo Bank predicted that Bitcoin could cross the $ 2,000 mark as the banking system as well as sovereigns such as Russia and China move to accept Bitcoin as a partial alternative to USD and the traditional banking and payment system. There are multiple factors at play the outlook is looking bright as an investor doesn’t jump to grab it at its peak as Bitcoin is still reactive to news and will allow buying or investing at more reasonable levels. 

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