Since the end of March, Bitcoin started to rise in price, breaking $2000 on May 20. Why is it happening? There are different opinions: some people say that the reason is Japan, others blame speculators. Listed below are three main reasons according to online publication Meduza.
Starting from April 1, 2017, Japan recognized Bitcoin as official mean of payment. The third world economy convinced the rest of the market participants of the reliability and validity of the crypto-currency. It affected the demand positively, and therefore, the cost.
Currently, Russia, the United States, India and Australia are also discussing the possibility of recognizing Bitcoin as a means of payment.
The rest market participants are also actively interested in bitcoin. The thing is that it is used to purchase most of other existing cryptocurrencies.
The decentralized nature of bitcoin limits its emissions. The crypto-currency is not backed up, and its share remains insignificant in the global money supply. The daily trading volume of bitcoins is about $2 billion. It is extremely low level, but often the crypto-currency is bought for investment, which only boosts speculators' interest.
Bitcoin is not tied to any of the existing stock markets, and fluctuation of its value is absolutely impossible to predict. Standard financial tools applied to currencies do not work with bitcoin. It also creates a high interest in the crypto-currency of the speculators.
As of this writing, the cost of 1 Bitcoin is $2288.
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