The cost of a bitcoin is over $1,000 again for the second time in under a month. Coinbase date indicates that a bitcoin was exchanging for $1,016.37 or $1,021.59 on February 3, 2017.
That means bitcoin has recovered a large portion of the value it lost when after the People’s Bank of China (PBOC) started investigating bitcoin trades in January. Bitcoin achieved a high cost of $1,069.40 on January 4, 2017, just to tumble to a new low of $822.05 on January 11.
Since then the world’s most popular cryptocurrency has steadily regained most of its lost value; since news reports indicate little or no hostility to bitcoin with part of PBOC. This looks like organic growth to me and there might be no end in sight.
What is Pushing Bitcoin’s Growth?
The big factors driving bitcoin’s growth are the mounting fears about currencies. The shaky nature of fiat currencies was brought home a year ago, when Indian Prime Minister Naranda Modi suddenly demonetized the two biggest rupee notes.
Other events including Brexit, the Trump race in the United States and the speculation about the collapse of the European Union are sowing questions about currencies. The sudden drop in the value of the Yuan and the meaningful economic growth in Japan are not helping matters.
This is driving people to hedge and all the more importantly to search for a hedging mechanism they can use for every day transactions. Bitcoin fits all the bill there, particularly since it can be used to make buys online, used to get money from ATMs and even used to buy Walmart or Amazon gift cards.
How Trump and China are Driving Bitcoin
China is ground zero for bitcoin adoption, and its use there is likely to skyrocket. That nation’s already lousy economy is being hit with speculation about an exchange war with the U.S., Chinese official newspapers are not helping with lots of articles attacking President Donald J. Trump.
Someone else helping bitcoin is Alibaba’s Jack Ma; who has been telling the media that China’s economy is about to get far worse. Ma has even told some reporters that he thinks a trade war is unavoidable.
Some of Trump’s other actions, such as blocking access to the U.S. for a few refugees and travelers, also drive bitcoin use. people who are afraid they can’t go to the U.S.; or journey to see relatives, will be more likely to use bitcoin to move money.
Expect to see bitcoin costs surge again in the next few months. A bitcoin cost of $1,500 or more by summer is very likely particularly if political instability keeps growing.
French Presidential Election could drive the Next Big Bitcoin Price Spike
The next big event that will drive bitcoin costs is the French Presidential decision which is scheduled for April 23. The front runner is radical patriot Marine Le Pen who may try to take her nation from the Eurozone. Also doing well is Socialist Benoit Hamon who is pushing a radical agenda that incorporates universal basic pay.
Hamon surprised observers by easily winning a landslide victory over front runner Manuel Valls in the Socialist Primary. The election of either Le Pen; or Hamon, would throw Europe into chaos and send a large number of Europeans to the bitcoin exchanges. Expect to see bitcoin costs go up by at least 10% if there’s a presidential surprise in France.
There is a strong probability that bitcoin costs will stay over $1,000 this year and possibly go far higher. Many bitcoin traders and speculators are going to make a lot of money this year if they ignore the skeptics. Something to consider is that Coinbase reported that the people who purchased a bitcoin on February 3, 2016 and sold it a year later made a benefit of $619.56.