Diversity of use
There is a lot more diversity now unlike how it used to be when the market cap was about $12 billion. Today, there are more merchants, more users, more means of buying and selling Bitcoin without hassles, more wallet providers, trading platforms, more understanding of how Bitcoin works and follow its investment track and more reasons to use Bitcoin.
In the case of Zimbabwe and Venezuela, for example, it is to escape the hyperinflation in these countries; it is currency controls for China and India; remittance in most parts of Africa; as a hedge and speculative investment tool in most parts of Europe and North America etc.
Conclusion In all, the economic realities that have emerged between 2013 and today have forced many people to seek alternate monetary solutions globally. The market outlooks that say more emerging markets are likely to see greater Bitcoin adoption in 2017 are in line with the ongoing trends highlighted above. It is a different world from what happened in 2013. The Bitcoin trend will continue for a bit longer before there could be a slowdown – if there would be any. In this perspective, it is right to say that the Bitcoin bubble has not even started yet.
Media Unlike in 2013 after the Mt. Gox collapse, positive news of Bitcoin rise is now starting to get the attention of the mainstream media which has the potential to make it gain the interest of a larger number of investors. This has been the case not only in the US and Europe but also in Japan, India and China which are huge markets for the world’s top digital currency but hardly hear about it in the media. The media hype is crucial as the war on cash is pushing countries to impose limits such as in Spain and Greece. This will eventually dawn on more people with time and present a massive growth potential for Bitcoin as well as some metal assets.
China China has become the top country for Bitcoin in the build up to 2016. Though it has a large concentration of Bitcoin-related activities, the use of the digital currency to prevent losses against the weakening yuan pushed several new users to join the bandwagon. This trend will continue into 2017 according to current reports that say the yuan is likely to see more volatility against the U.S. dollar after the China Foreign Exchange Trade System which operates the country’s foreign exchange market changed the way it calculates a key yuan index by increasing the number of currencies in the basket from 13 to 24 starting Jan. 1.
Money Transfer Remittance to key countries like Philippines, India and Nigeria which top the list of the world’s receiving countries according to the World Bank have been made easier with the discovery of Bitcoin for payments. Traditional banks charges for the transfer of money from one point to the other particularly in least developed countries mostly in Africa still go as high as 10%. Bitcoin has offered its users the same service at a better exchange rate and for less charges.
Increased Internet use Global Internet usage which has increased the information dissemination about the digital currency as well as its technological benefits also played a role in the past three years. As a result, more people who were hitherto not interested in the digital currency have now started paying more attention today. They seek and get firsthand information easily by watching price charts and following happenings in the markets to enable them make wise investment decisions.
Volatility drop The rise in the price of Bitcoin today has been less volatile than when it had a similar push in 2013. There hasn’t been huge crashes in the price swings which show a clear distinction in trends as it happened then and now. With a recent paper by Chappuis Halder & Co. showing that the volatility of bitcoin is forecasted to reach a similar level as other current fiat currencies by 2019, this is a huge relief as it will possibly make the pricing methods of Bitcoin possible.
Several factors including China’s economic situation have made the Bitcoin surge different from what was the case in 2013 when the price first rose above the $1000 tag but later reversed. As a result, the rising price of Bitcoin today is not likely to suffer a similar fate. Going by its record up till 2016, Bitcoin has put several economic theories in doubt and come up with an established price that cuts across multiple exchanges. Below are some of the observed factors that made it happen:
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