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The Seemingly Unstoppable Bitcoin

By Brent CarrierForexMay 25, 2017 05:49AM ET
The Seemingly Unstoppable Bitcoin
By Brent Carrier   |  May 25, 2017 05:49AM ET
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Seven years ago, a single bitcoin was worth a quarter-of-a-cent. But over the course of those seven years, its value has multiplied. This week, for the first time ever, bitcoin surged past $2,000. Namely, on Sunday night or Monday morning, the cryptocurrency topped $2,000, $2,100, and $2,200. Reportedly it is now topping at $2600. It is now trading up by $184.36, or 9.1%, at $2,208.94 a coin. In two days the value of this currency increased by more than $ 100, and since the beginning of the year, its price has risen 81 percent. In the past week alone, the price of bitcoin has gone up for 12%. Monday also marked the seventh anniversary of the first recorded instance of bitcoin used in a real world transaction.

Earlier this year, the value of a single bitcoin was around $ 1,000, but since then it slowly started growing. Bitcoin first broke the $1,000 mark in 2013, but it was soon followed by a drop in value due to a combination of factors. Since 2010, bitcoin has been the top-performing currency, except for 2014, as already mentioned. At the end of last year, the new regulation in China returned bitcoin to the $1,000 mark again. Since then it has continued to grow in worth. Now, the world’s most popular cryptocurrency is worth over $2,000 per coin, and the total number of coins in circulation is $32.92 billion.

The political uncertainty and increased interest in Asia have helped elevate the level of interest in bitcoin. The "legalization" of the bitcoin in Japan, and the rising demand in China due to the weakness of the local currency, also helped the bitcoin climb to a higher value. The unpredictable currency market prompted people to buy bitcoins, and since April, its value seems unstoppable. Some investors see bitcoin as sort of a safe haven asset in the middle of this geopolitical turbulence in both Europe and the United States. Despite everything, the debate on the future of bitcoin continues. For example, even though Japan legalized the bitcoin stock exchange, Russia still remains one of its strongest opponents. In the United States, people hope that bitcoin will get a second chance.

Bitcoin isn’t the only cryptocurrency on the rise. In under a month, ripple surged more than 1000%, and became the second most valuable cryptocurrency in circulation, just behind bitcoin. Similarly, ethereum has seen its net worth more than double over the last month, trading $130 per coin with a total market cap of around $12B. These increases also mean that bitcoin no longer makes up for the majority of the cryptocurrencies market cap. Until a few months ago, the total market cap of bitcoin consistently hovered around 80%, and today represents only 47% of total cryptocurrencies.

At the beginning of March, for the first time in history, bitcoin exceeded the value of gold. Experts predict that by 2020, the circulation digital money in Japan will reach up to nine billion dollars. This shows that in the future, the bitcoin will have an increasingly important role in financial transactions. In the next 10 years as the world becomes more connected through smartphones, the percentage of noncash transactions will rise from 15% to 30%. By 2020, it is expected the total number of smartphone users to increase by 1 billion. This way nearly everyone could have a bank in their pocket, which will give bitcoin an additional boost. It also means that bitcoin could account for 50% of all noncash transactions.

Since its inception in 2009 and all the way up to today, bitcoin has had its ups and downs. Although it is officially "created" by Satoshi Nakamoto, the public believes that behind this pseudonym hide some of the world’s most powerful companies like "Toshiba Corp. (T:6502)", "Samsung (KS:005930)", "Nakamichi Corporation Bhd (KL:NAKM)" and "Motorola (NYSE:MSI)". Nevertheless, bitcoin is becoming increasingly popular.

The Seemingly Unstoppable Bitcoin
The Seemingly Unstoppable Bitcoin

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