Bitcoin Jumps Above The $1,000 Mark After Three Years
The price of Bitcoin breached the $1,000 mark on Monday on its first day of trading in 2017 for the first time since December 2013 making it the best-performing currency of 2016.
According to CoinDesk, after breaking through the $1,000 mark on Sunday, the world’s leading digital crypto currency was trading at $1,027 US per Bitcoin on Monday, which is an increase of more than three percent within a day. It is now within reach of its historic high of more than $1,200 reached in 2013. Other crypto currencies that have risen in the wake of Bitcoin, includes Ethereum, Ripple, and Litecoin.
The blossoming digital currency, which has been criticised as a vehicle for a range of evil characters from drug dealers to tax evaders to operate, outperformed all its central-bank-issued counterparts with a 125% increase in value in 2016.
Bobby Lee, chief executive of BTC China, one of the world’s largest Bitcoin exchanges, told CNBC, “We are seeing the aftermath of zero interest rates run amok. So, Bitcoin is a healthy reminder that we don’t have to hold on to dollars or renminbi, which is subject to capital controls and loss of purchasing power. Rather it’s a new asset class.”
So, why has Bitcoin been rising so rapidly? Some analysts attribute it to uncertainty over the global economy, and especially the election of Donald Trump, while others believe that some investors treat it as a safe-haven, like gold, at a time of global uncertainty. Further, Bitcoin’s government-free nature makes it very attractive for people looking to protect themselves from unrest in traditional markets. In addition, the biggest reason of the recent price spike has been the drop in value for the Chinese Yuan and Indian rupee.
“The growing war on cash, and capital controls, is making Bitcoin look like a viable, if high risk, alternative,” told Paul Gordon of digital currency firm Quantave.
Bitcoin was launched in 2009 as a bit of encrypted software written by someone using the Japanese-sounding name Satoshi Nakamoto. Encrypted digital coins are created by supercomputers and then traded online or exchanged for goods and services by a network of users. Bitcoin is decentralised unlike traditional currencies such as the dollar or the euro, which require the sponsorship of a central bank.