The price of bitcoin has breached the $1,000 mark, hitting a more than three-year high on Monday.The cryptocurrency was trading at $1,021 at the time of publication, according to CoinDesk data, at level not seen since November 2013, with its market capitalization exceeding $16 billion.Bitcoin has been on a steady march higher for the past few months, driven by a number of factors such as the devaluation of the yuan, geopolitical uncertainty and an increase in professional investors taking an interest in the asset class.”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,” Bobby Lee, chief executive of BTC China, one of the world’s largest bitcoin exchanges, told CNBC by phone.Chris Ratcliffe | Bloomberg | Getty ImagesChina is the source of the majority of trade in bitcoin and the devaluation of the yuan and fears over capital controls have contributed to the recent spike in the digital currency.But several other factors have also had a notable impact. For example, bitcoin’s price has appreciated around 137 percent in the past 12 months but got a big boost after Donald Trump won the U.S. election in November.Another big event this year was in June when a change in bitcoin’s underlying rules meant those who were “mining” the cryptocurrency – a process whereby users are awarded with bitcoin if they solve complex mathematical puzzles in order for a bitcoin transaction to go through – received less rewards. This was due to the process known as “halving,” which essentially reduces the supply of bitcoin.But overall, bitcoin experts said that the market is growing in terms of volumes and those participating, creating a “network effect” that will see the price rise further.”The value of Uber in any city is directly dependent on the number of drivers and number of users, it’s not linear it’s exponential. The same is true of the value of bitcoin,” Lee said.
Whoa! Did you see that?Bitcoin price has suddenly surged to reach the $500 mark. Until Friday, the digital currency has been hovering around the $450 mark before it started to exhibit an upward trend gaining about $50 within a span of two days.chartThe volatility associated with cryptocurrency prices is a well-known fact, which is mainly due to the demand and supply of the crypto assets for trading. The current surge in Bitcoin price has been attributed to increased trading activity in China and Korea, a 10% premium has been there in these countries for a very long time.The price rise was first observed in the Chinese exchanges. OKCoin and Huobi were the first bitcoin platforms to see an increased demand for the digital currency, resulting in the price to rush past the $500 mark in no time. But the increase in price has been a bit slow to catch up with the Western market. The last time Bitcoin price crossed $500 was during the month of November 2015, when it briefly spiked to cross the $500 mark only to settle back $400-$450 range in the next few days.While the current trading price of one bitcoin is currently around $499-$500 in the US market, the same is being traded for an upwards of 3500 Yuan, which is equivalent to $533 on OKCoin. As always, the increased demand has been attributed to the weakening Chinese economy due to the devaluation of the country’s legal tender, yuan. The Chinese have started to consider Bitcoin to be an alternative investment option as the country maintains strict capital controls, preventing people from investing in other currencies or assets outside the country.As Bitcoin Price Surges, Ether Registers a SlumpAs the Bitcoin price continues to rise, traders across the world have started trading bitcoin with renewed interest. It seems like many traders are trading other crypto asset holdings for bitcoin. Ethereum, which has been in the good graces of crypto-traders so far is bearing the burnt at this time. With more people trading in their ether holds for bitcoin, the number of takers for ether has significantly reduced at the moment. This has led to a drop in the value of ether.Bitcoin Price Driven by Chinabitcoin price, etherThe market volume and currency distribution statistics clearly show that the Bitcoin market is being driven by the Chinese Bitcoin community. However, the rise in Bitcoin prices at this moment may be short-lived as the market stabilized once the demand phase is over.
Bitcoin Price Increase
Bitcoin prices broke through $500 on 28th May, building on the previous day’s momentum to reach a level not seen since August of 2014.The sharp increase notably helped extend the digital currency’s recent rally, which has provided a stark contrast to the relative stability bitcoin experienced in the last several weeks and for much of the first half of 2016.Overall, Saturday’s move represented a 5.8% increase from its opening value of $473.47, a sharp rise that added to a 4.3% gain that took place on 27th May.The digital currency first broke through the $500 level between 06:00 and 06:14 UTC on the 28th, eventually reaching a high of $531.70 for the day. At press time, the price had sagged somewhat, though prices remain $50 higher than just two days before.During the run, prices hit their highest level since 21st August of 2014, when the price of bitcoin reached a high of $532.99 on the CoinDesk USD Bitcoin Price Index.Robust OptimismAside from the price increases, however, there was no clear verdict on whether the run would continue.Data provided by bitcoin trading network Whaleclub suggests long-short ratios reached record levels of 15:1 over the last few days, a figure that shows that sentiment is currently best described as bullish, at least for now.”No clear fundamentals or catalysts are powering this rise in price,” Petar Zivkovski, director of operations at Whaleclub, told CoinDesk.He said: “Emotions have taken over: Traders have taken their rational lenses off and are buying with the expectation of selling higher in a short period of time. Inevitably, low-entry buyers will rush to take profit and price dumps will ensue.”On the other side of the spectrum, market observers speculated that the effect of an upcoming decline in the amount of bitcoin paid to miners who process transactions on the network could fuel continued demand.Such a sentiment was cited by OKCoin chief strategy officer Jack Liu who said that “deflationary pressures” could convince more buyers of bitcoin’s value long term.
Bitcoin Price: The Last Time This Happened, Bitcoin Prices Soared 3,950%Bitcoin PricesSomething big is about to happen to the bitcoin price, and it could send bitcoin prices through the roof.You see, this digital currency has a unique monetary policy. Bitcoins are created roughly every 10 minutes, but there can only ever be 21 million of them. The rate at which bitcoins are created will drop by half every four years until all 21 million bitcoins are in circulation.Last time the halving event happened was in November 2012, when the price of a bitcoin was around $12.00.Since then, the bitcoin price skyrocketed. At $473.80 apiece, the price of a bitcoin has increased by 3,950%!The next halving event is expected to happen in less than two months. This could spark a new rally in bitcoin prices.However, there is a major concern about the event. For the Bitcoin system to function, it relies on a group known as miners to keep processing the transactions. What is the incentive for miners? They get the new bitcoins created every 10 minutes.Now, if the number of newly created bitcoins drops by half, miners would get fewer rewards unless the price of bitcoins doubled immediately.Should you worry about the miners who are responsible for keeping the network running?Well, several insiders are saying that the industry will be fine. For instance, Valery Vavilov, chief executive officer of bitcoin infrastructure provider Bitfury, said that “the profit margins will be less temporarily but we are ready for this.” (Source: “Bitcoin Production Will Drop by Half in July, How Will That Affect the Price?,” Forbes, May 24, 2016.)Also, note that just like farmers who hedge their risk using commodity futures, bitcoin miners can do the same. According to Bobby Lee, chief executive officer of Bitcoin mining pool and exchange BTCC, miners “know how many Bitcoins they’re going to make over the next six months, so they pre-sell the Bitcoins at today’s price so they don’t have to worry.” (Source: Ibid.)Recently, investment bank and asset management firm Needham & Company initiated coverage on Bitcoin Investment Trust with a “Buy” rating and a price target of $62.00. The firm values bitcoins at $655.00 apiece, representing an upside of 38.2%. (Source: “Bitcoin Undervalued by over $200, Investment Bank Reports Finds,” CoinDesk, March 29, 2016.)
Cointelegraph announces the release of our brand new Bitcoin Price Index – a comprehensive tool for tracking Bitcoin price changes and historical data, analyzing the market and making trading decisions.It is an easy way to track Bitcoin exchange rates and keep an eye on the value of Bitcoin.The index was developed in co-operation with BitcoinChain.com, a “one-stop shop” which has been providing general information on the cryptocurrency industry and quality tools for Bitcoin analytics since 2013.What is CoinTelegraph’s Bitcoin Price Index?As such, the CT’s Price Index is aimed at delivering all the latest essential Bitcoin data in an efficient, yet accessible form.Our index offers the most popular features required by the general audience and, at the same time, covers the needs of the more demanding groups, such as traders and market analysts.Aggregated Bitcoin price tickerAggregated Bitcoin price ticker is available in 5 currencies: EUR, USD, GBP, CNY and RUB.The index aggregates data from multiple leading cryptocurrency exchanges: OKCoin, Kraken, Bitfinex, Coinbase, Bitstamp, CEX.IO, HitBTC, Btc-E, Gemini and itBit.
Bitcoin Price Takes a RestBitcoin PriceBut as one source puts it, things are set for a flash of the old gloom and doom: “A price downdraft, today, has pulled the price to $454… Given the bearish indications in the 1-day and 1-week candle charts that were explored in last week’s analysis, there is also a high probability that the market eventually declines to $430… The bitcoin market’s capacity for slow torture may see the slow, upward strain continue for several more weeks… Bitcoin’s price range is narrowing as the market progressively trades price into the high-pressure corner of a contracting wedge… The technical analysis outlook remains that price will most likely unfold a downward correction…”One troublesome side effect that seems to come with being a Bitcoin enthusiast is that you learn to expect (and thereby prepare) for the worst. This isn’t always a bad trait; after all, it keeps us on alert. We’re ready for when things get rough, and when that day comes, we’re far from being like a family of deer in the headlights.However, maybe the time has come to relax a little. In our previous price piece, one user explains: ‘What’s wrong with Bitcoin having a stable price? We wouldn’t like it if the value of a dollar kept jumping all over the place. A loaf of bread could be $2 one day, and $5 the next. Stability is what bitcoin needs to make it a currency and not a commodity.’Interesting words indeed, and this user certainly has a point. Despite being eight years old, bitcoin still needs little breaks here and there to make its bones and develop a steady future for itself. Things cannot be 24-hour ascension. We’d certainly like that, but the fact is, such an idea is unrealistic. Things need time to patch themselves up. Time is necessary to heal wounds and fix mistakes, and considering the fluctuations bitcoin has endured in the past, a little stability really wouldn’t be so terrible. How can bitcoin ever truly be taken seriously as the currency of the future if it can’t learn to step back and smell the roses here and there? How can regulators ever look at bitcoin as something that’s less problematic if it can’t focus and stay still for a moment or two?Ironically, this user’s words also seem to bear a sense of foreshadowing. One of today’s biggest headlines is rising inflation rates in the United States. In fact, they’re the highest they’ve been in about three years. Maybe USD can learn a thing or two from Bitcoin after all…