Bitcoin price SURGES by £1,800 in a week– experts reveal the top theories why
BITCOIN'S price has surged to £6,200 per coin – and investors think it could be due to the US China trade war, fears over the stock market, panic over Bitcoin supply and more.
The value of a single Bitcoin has skyrocketed by more than 60% in the past month, reminding the world of its meteoric rise to an all-time high of £14,000 in 2017.
In the past month, Bitcoin has risen in value by around £2,300.
And in the past week, the price has risen by an impressive £1,886 – roughly 43%.
It's still a long way below Bitcoin's December 2017 high, but the rapid pace of growth has investors scrambling to explain it.
Expert Alyse Killeen told that the impending reduction in Bitcoin supply is driving the price upwards.
"Anticipation of the upcoming supply shock may be creating upward pressure on the price of Bitcoin,"; Alyse, a partner at investment firm Stillmark, explained.
"Bitcoin is introduced to the market when the Bitcoin protocol rewards miners who validate blockchain transactions.
"Specifically, the Bitcoin protocol gives BTC to miners for adding blocks to the blockchain.
"Today, miners earn 12.5 BTC for adding a new block that is accepted by the network.
"In May 2020, the time of the next "halvening", that reward will be reduced to 6.25 BTC, thereby reducing the total number of BTA introduced to the market on a daily basis."
What is Bitcoin?
Bitcoin got you baffled? Here's what you really need to know
- Bitcoin is a virtual currency
- It's traded between people without the help of a bank
- Every transaction is recorded in a public ledger, or 'blockchain'
- Bitcoin is created by mining
- Mining involves solving difficult maths problems using computer processors
- Bitcoin can be traded anonymously, which makes it a popular way of funding illegal activities
- A single Bitcoin is worth just under £5,000 today, but the value fluctuates wildly
- Bitcoin is one of many different cryptocurrencies, but by far the most popular
Bitcoin is a famously fickle currency, changing by thousands of pounds in value in a single day.
This has led some investors to only examine bigger trends – because day-to-day Bitcoin pricing is so unpredictable.
Speaking to TechCrunch, Travis Scher at the Digital Currency Group said the price rise is simply down to growing interest in Bitcoin as a "safe" investment.
"I spend very little time trying to understand or explain short-term crypto price movements, as the price and the fundamentals often seem to move in diametrically opposed directions," Scher explained.
"So all I can say with certainty is that there are more buyers than sellers in recent months.
"But in this case, I do think that one factor driving the rally is that the narrative around Bitcoin as digital gold is growing.
"We fully expect Bitcoin to replace gold as the leading non-government controlled store of value over the coming decade."
There's also growing hype on Reddit's main Bitcoin subreddit, where fans of the cryptocurrency are speculating about the rise.
Some are sceptical about whether we'll see a similar crash to the one after December 2017.
"Honestly? This explosive growth does not feel healthy and looks pretty much like Dec '17," one user wrote.
"I'd prefer slow and steady; but like this I expect it to crash hard any day now."
Another suggested that fears over the US-China trade war and stock market slumps are attracting buyers to Bitcoin.
"This bull run is also going to be fuelled by investors who are seeing traditional markets fall and want to diversify," they said.
During last year's Bitcoin price slump, some suggested the cryptocurrency was ready to die.
But others weren't convinced – and thought Bitcoin would live on.
We spoke to Bob Loukas, found of Bitcoin.Live, who said: "The Bitcoin hype is definitely not over.
"With mainstream uses being created every day, we are only beginning to see what this phenomenon can do.
"One of the biggest misconceptions about Bitcoin and cryptocurrency is that it is a passing fad, or at best a bubble that will eventually pop."
The reality still remains that Bitcoin is one of the best performing assets of the decade across the board.
"A good investor will know that the key to successful investment is to invest for the long term, not the short term and that they shouldn't panic sell when the price falls."
And Alexey Burdyko, CEO and Founder of Play2Live, told The Sun: "Bitcoin is currently going through the bear market and will, as it has done before, come out the other side and whilst it might not hit the heights of late 2017, it will still have considerable value."
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Confused by crypto? Read our beginner's guide to Bitcoin.
Bitcoin was previously blasted as a "failed experiment" after a huge 70% price crash.
And the world's first Bitcoin city where cash is banned hopes to attract 3million "crypto-tourists" a year.
Why do you think Bitcoin's price is surging? Let us know in the comments!
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