As the world’s top digital currency continues its winning streak, it has recorded more than eight straight days of gains which makes Bitcoin price now stand at $1,044 per coin.
This slow but steady climb will continue to above $2000 before the year is out for one big reason: a new direction - unless there is an unlikely catastrophe to the industry.
This change in direction would be in line with industry predictions including those from Vinny Lingham, the CEO of Civic.com who analysis of the crypto market and the Saxo Bank. Lingham projects that the price of gold will dip or end this year at below $1,000. This, he adds, will likely push Bitcoin price to between $2000 and $3000 in 2017. From Saxo Bank’s ‘Outrageous Prediction For 2017’ late last year, the spending binge of a President Donald Trump could push Bitcoin price to test $2,000.
After the People’s Bank of China conducted onsite inspections of the top three Bitcoin exchanges in China in January, a key trend that has become conspicuous in the Bitcoin market is the flow of the top digital currency away from China.
China’s top bank meddled into the activities of the country’s top Bitcoin exchanges - BTCC, OKCoin and Huobi which were controlling about 90% of global Bitcoin trading at the time - in the first few days of January after an inexplicable false start in a bid to stem capital outflow.
The move changed the Chinese position which they have held for about four years according to Bitcoin analytics from Bitcoinity. Their grip on the market dropped to over 20% as the PBoC unraveled some discrepancies in the manipulation of trading volumes which subsequently called for a review of the exchanges’ operational activities and changed the entire market scene.
The rising Bitcoin price at the time slumped and the fake Bitcoin rates the exchanges were generating stopped as they put an end to margin trading to start charging trading fees which has not been the case in years.
The 0.2% trading fee that was introduced brought about how other trading pairs with zero-fees absorbed some of the Chinese yuan-based volume that we have seen in the past. Instead, it resulted in the increase of BTC/USD trading on exchanges like Poloniex as well as Japan’s Bitflyer though with a boost to the JPY/BTC too.
Aside the few minor and expected distractions that may come its way, the seemingly new shift from the East to the West would make the market be less vague and more predictable. This is evident in the current pace at which Bitcoin’s value has been growing which seems logical than how it grew in the first week of January when the alleged manipulation were going on.
Also, along with several other factors, the new direction will boost the reposed confidence in the Bitcoin market especially for its interoperability with the USD which is a common global currency that is easily associated with more trading activities than those conducted in other currencies such as the CNY.
The BTC/USD factor is important because it can now make more people - mostly those who may have nursed doubts in the investment potential of Bitcoin in the past based on the Chinese dominance of the market and its attendant uncertainty - to buy Bitcoin with the view that the entire ecosystem is gradually working towards a balanced market that is tilting towards being dependent on the BTC/USD pair.
It will also make the calculation of Bitcoin rate easier for those who have not been au fait with what’s been happening to the Chinese yuan.
While there are other issues that have been highlighted to push Bitcoin price above the $2000 mark in 2017 - the debate over the activation of SegWit, the ETFs’ approval, new use cases for Bitcoin and the economic showdown in parts of Europe, others are spreading insidiously as complementary factors.
Some of these factors that are now getting to the fore as contributing to the strengthening process of Bitcoin price include the growing access that non-techie people now have to the digital currency and the growing popularity of Bitcoin from Nigeria to Uganda, Vietnam, or Iceland.
The level of understanding has also improved and many more people now know how to create user-friendly Bitcoin wallets on any device today, they can access fund with Bitcoin using debit cards that are linked to their wallets and buy bitcoins with bank transfers.
The number of Bitcoin teller machines have increased of late and the interesting debates about using Bitcoin to secure futures are no longer new particularly with the stock-buying nature of connection that the launch of exchange traded funds are trying to create.
In developing countries like India and parts of Africa where the concept of digital or cashless economy is gradually taking off, more people are waking up to the reality of cryptocurrencies such as Bitcoin.
When we look at what has changed in recent years, it is certain that this ease of access - and use - will continue to get easier even as the legal status of Bitcoin is getting known and recognized in some countries such as Russia and China where developments have shown that they are not against it but seek its regulation to determine the right approach as governments.
It is worth noting that despite the tide that seems to have changed towards more USD-based Bitcoin transactions, China’s relevance could not be overlooked. Even with the change, the recent rise of Bitcoin price over the $1000 rank for the second time this year was first recorded in the Chinese market as people in the country celebrated the Day to Welcome the God of Wealth.
While it is not definite that there will be a greater level of stability in Bitcoin price because of the current tilt towards the BTC/USD pair, it could be easily assumed that the likely tug of war would be from the Chinese move to maintain a share of the market - if not to control more of the market - and that may not come easily.