Bitcoin has had a better year than Netflix, Facebook, Apple, Disney, Microsoft, Exxon, and Amazon combined. With a rise of 200%+ in value over the past twelve months, the second life of Bitcoin appears to be in full swing.
2013 ended with a collapse that many thought we would never recover from. The fall of several major fixtures in the community led to a nosedive during the following year, ending with 85% of Bitcoins value squandered. In 2015, we found stability, as the community worked to rebuild its foundations, and gain back lost trust. Near years end, the tides suddenly began to change, and the price once again became bullish. The momentum was gradual at first, but mid-May, something happened that led to nearly an 70% rise over 30 days; a rise so prolific, we have only ever experienced such a boost once before in our history.
What has caused Bitcoins skyward launch? Will it last, or is it only a matter of time before the faithful are left holding their bags?
It is an observable fact that a majority of the upward pressure over the past month has come from China. Fear of the Yuan’s depreciating value may have driven Asian markets to heavily invest in Bitcoin once more. Government imposed capital controls may be leading to panic amongst Mainlanders, fearing an economic collapse akin to the U.S. recession of 2008. Digital currency may be considered a stronghold in which to fortify themselves against such an event.
With the block reward halving drawing closer, thousands may be flocking to invest in Bitcoin, in anticipation of a rise like the one experienced in 2013. The resilience of the technology, coupled with market conditions similar to the rise of 2013, could be increasing Bitcoins favorability amongst investors who exited the space when the market crashed.
Positives > Negatives:
Several large increases to Bitcoins price came at the intersection of important events, as positive news began to outweigh lingering negatives from Bitcoins past. Shortly after the final auction of coins from the Silk Road Investigation, Bitcoin saw a crucial 40% rise in value, leading into the new year. Next, payment distributions from failed bitcoin exchange, Mt. Gox, were finally announced after over two years of waiting, potentially making thousands of former users whole. These events signaled the conclusion of one of Bitcoin's darkest chapters. At the same time, news of Wall Street and the U.S. government’s move towards Blockchain acceptance from within began circulating through the community. The days that followed saw a rise of 55%, possibly due in part to the growing realization that blockchain could revolutionize the ownership and transfer of global assets around the world.
Lower Barrier to Entry:
Prior to the big crash in 2014, Bitcoin was not easy to get ahold of. In the years since, access to Bitcoin has become a driving force for major Blockchain companies. Now that the price has begun to rise once more, investors old and new have returned to take a second look. Unlike last time however, lowered barriers to entry are making Bitcoin accessible in ways it has never been before. Even non-technical users are able to jump on board this time around, thanks to instant access through major exchanges, and Bitcoin ATM’s around the world. The legal standing of Bitcoin is clearer than it was, as well, relieving the fears once associated with investing in Digital Currency.
With greater acceptance comes increasing transaction volume. This demand inevitably leads to a rise in price. It is unclear where Bitcoin will go from here. True believers champion a day when a single bitcoin will be worth tens of thousands of dollars, while detractors continue to chide even the three year low as an idealistic fantasy. The hope of the community is that, by giving us a few years to quietly build our infrastructure, Bitcoin will rise stronger, and more appealing to the general public than it has even been before.