There are less than 10 days left in 2016 and the price of Bitcoin is still following an upward trend. In the last seven days, the world’s top digital currency gained a 9% increase - from $781 to $850 - surpassing the $800 range for the first time since January 2014.
It is worth noting that what has been highly significant about the price trend this year is its ability to correct quickly and easily.
There have been constant adjustments to the price of Bitcoin fuelled by several factors particularly in the last quarter.
From the weakening yuan to the economic crisis in Venezuela, the demonetization process in India and the election of Donald Trump as U.S. President, the impact of these happenings - as well as others not mentioned - occasionally spikes the price of Bitcoin.
Every time there is an increase, more awareness is created about the currency which in turn draws new users to the Bitcoin-fold as they adopt its use mostly as a store of value. The added new users - particularly in highly-populated countries such as China, India and, lately, Nigeria - helps sustain the push to a new price limit.
This process has been on a continuous pace and will still play out even as speculations are rife that some factors including Trump’s ascension into office will jerk the price higher in the first few months of 2017.
Coupled with the current market outlook, it is convenient to say that most eyes should be on the weakening Chinese yuan to suggest a Bitcoin price edge close to $900 in a matter of days.
The drop in yuan, which has been predicted to continue on its downward trend till January will be a key determinant of the exact amount it would peak.
The yuan contributed to the stumble recorded in the Chinese stock market in the last month. According to the Wall Street Journal, there’s been a pickup in IPOs recently and investors expect a wave of selling by shareholders whose stockholdings have been locked up in investment in listed companies.
The stock market stumble flocked new users to Bitcoin slightly increasing its price from its $751 price on December 1 - that was before Hong Kong-based Sinolink Securities calculated that more than 370 billion yuan of such locked-up shares are tradable this December (China requires existing shareholders of a listed company to hold their stocks for at least a year after the firm floats).
With the securities firm also noting that 440 billion yuan worth of such shares would be coming up in January, it gleams on what the market is likely to offer soon.
We could have expected to have reached a $1000 mark by now if it weren’t for the Bitfinex hack in August. However, going by its 87% increase since the beginning of the year when it started with a $432 price tag in line with some of the indicators mentioned earlier, it is safe to say that Bitcoin could still claim a realistic 9% minimum increase on its current $850 price by next week.
Cryptocurrency market expert Olusegun Ogundeji