Bitcoin Is Now Worth Over $10,000 USD
On Tuesday 28 November 2017, for the first time since the creation of Bitcoin in 2008, the cryptocurrency surpassed the USD $10 000 mark and it shows no signs of slowing down as it continues to climb towards $11 000.
The surge in price comes off the backdrop cries from doubters who claim it is only a matter of time until the Bitcoin bubble bursts. Well it hasn’t yet and quite frankly does not show any signs of weakening. Despite concerns around Bitcoin’s association with criminal activities, investors have still jumped onto the Bitcoin train as an alternative to traditional assets such as gold.
“As the supply of Bitcoins is kept fixed by the underlying protocol, price increases are essentially due to increasing demand. Bitcoin is becoming more like an asset class rather than a method of payment. This is something that the public and regulators should realise to fully understand the price dynamics of Bitcoin.”
“In a sign of accelerating demand pressure, the number of active Bitcoin wallets has grown almost five-fold over five years. Similarly, the number of exchanges has been increasing exponentially since early 2017, partly driven by the explosion of the Initial Coin Offering (ICOs) as a funding strategy to set new marketplaces, and partly driven by increasing margins and profitability due to increasing Bitcoin prices.”
“Demand pressure is essentially driven by two things. Firstly, the increasing awareness by both the public and investors that cryptocurrencies are here to stay, and secondly, the increasing professionalisation of cryptocurrency trading,” concluded Dr Bianchi.