Bitcoin is once again popular. The cryptocurrency started the New Year with a bang, and rose to a two-year high on the first day of trading, which was January 1st. The main reason for Bitcoin’s fast rise in value is Chinese traders’ concerns that new taxes would be levied against foreign currency exchange in 2017. BDB analysts have found that Bitcoin’s value rose slightly over the course of 2016. However, the recent leap suggests a much sharper trend.
Bitcoin’s unique nature as a stateless currency with a hi-tech twist has captured the minds of Chinese traders from the start. China took a big part in Bitcoin’s historic surge back in 2013, which led it to its past peak value of $1165. But the Chinese government had interfered, and stopped exchanges in Bitcoin from happening in the mainland. This resulted in Bitcoin losing half of its value over the course 2014. Now, however, there is far less chance of history repeating itself. While China has not changed its prohibition on Bitcoin exchange, it also hasn’t shown any sign of stopping the mining of the cryptocurrency within its border. In addition, China’s central bank has shown interest in the blockchain technology that makes Bitcoin possible. Cracking down now may cause China to miss out on the lucrative innovation going on in that field.
There is even more to come. According to BDB analysts, Bitcoin is expected to rise even higher this year. Propelled forward by numerous forces including strong market momentum, rising interest rates and an influx of new money, the digital currency is set to go up, unless an unforeseen event will push it out of favor.
With big changes to the world’s economy on the horizon, and increasing geopolitical instability, Bitcoin is set to take the same role as gold. Not bound to any state, and limited in supply by its very nature, the cryptocurrency is free of risk of inflation and could survive periods of instability. As the world is still basking in the New Year’s celebrations, it seems that Bitcoin owners have more to celebrate than most.