The bitcoin caresses $ 1,000 after the dizzying rally is starring in the criptodivisa 2016. And while exhausted promises many emotions stronger because their acelerón is based in currency wars and government decisions cash, two phenomena that no they are passengers.
The most popular digital currency has experienced sustained growth since the summer of 2015, which accelerated from September this year. A bitcoin was trading at just over $ 200 in late August 2015 and 10 months later, in June 2016, the online currency reacted to Brexit shooting up prices above $ 760, although the subsequent correction was consistent: a end of July, each unit traded at $ 490. Currently, almost double this price.
In addition, bitcoin has already exceeded 15,000 million capitalization , a new record high reached on 27 December, and their dollar value is situated just 20% below the highs of November 17, 2013, in 1,216.73 dollars reached at the old house Mt. Gox exchange which fixed the value of bitcoin until its bankruptcy in 2014.
But unlike three years ago, the appreciation is now experiencing cybercurrency does not originate in a bubble , but due to two reasons. On the one hand, to popularize its use and volume and, secondly, a real need for an alternative to the global monetary system in a world in which different governments are taking decisions to embark them in currency wars or have impact cash in circulation affecting citizens.
technical and technological causes
To explain the first of the reasons, the expert in bitcoins Néstor Pavón argues that has significantly increased global demand for bitcoins, resulting in upward pressure on its price. In his view, this response reverses a situation where the criptodivisa was “too cheap” because “the charts for some time now pointing to an appreciation to 800 or 850 dollars.” Bitcoins operator explains that the ‘miners’ have also multiplied in a short time and it is estimated that the power at the service of technology that underpins the currency is already 500 times the servers Internet giants like Google.
The ‘mining ‘ of this ciberdivisa named after the fact that they also work discovering new virtual currencies, up to a maximum of 21 million bitcoins in circulation can be , currently they are about 16 million-. In addition, these users put their computers to serve the global network of bitcoins and collaborate so that transactions are carried out and are written in the great ledger of transactions in this currency on the Web: the ‘blockchain’ (chain blocks). Pavon said that has also become increasingly expensive support this global network of computers -each ‘mining’ charges a transaction fee, so more computers, less capital to repartir-, so believes that the fair value of bitcoin , for now, it is around these 850 US dollars , at most. Price levels “form a floor that will hold the ciberdivisa if corrections and setbacks”.
Simon Dixon, CEO of the platform investment in new technologies BnkToTheFuture.com , believes however that the spike in trading of digital currency in 2016 will continue in the next year and has qualified bitcoin growth as the new index measures “disaffection global monetary policy”. Speaking to The Cointelepraph has indicated to governments as “drivers that criptodivisa is being embraced by more and more users.” This is the second major cause of the recent rise of digital currency. Angel Leon, founder of DiarioBitcoin.com notes with ‘names’ to their responsabes : regulations, increasingly restrictive , Xi Jinping China has imposed to mitigate capital flight and desmonetizaciones carried out by Narendra Modi India and Venezuela Nicolas Maduro.
China, the big culprit
But, especially, everything seems to point to China. In just over a week, the dollar value of bitcoin has increased about 18% and at the same time the volume yuan has soared 20%. Increased transactions in Chinese houses change could be anticipating a further devaluation of the renminbi , as also called the yuan – . The phenomenon is not new to Néstor Pavón, who said that the depreciation of major currencies are strongly correlated with the findings in the bitcoin by the laws of a technique arbitration is to perform a combination of complementary transactions between two or more markets that capitalize on prices- imbalance.
Being China ‘s largest market worldwide bitcoin, which currently moves 50% of the total volume of capital that operates in cybercurrency , it’s easy to relate the depreciation of the yuan, which has more than 6.7% lost in 2016 against the dollar, and the rising price of bitcoin. In addition, operating in this virtual currency is the only way left to the Chinese citizens to avoid pincer People’s Bank of China and the State Agency Market of Foreign Exchange (SAFE for its acronym in English) to avoid increasing outflow of funds from mainland China, which could exceed 700,000 million dollars this 2016 . The country ‘s authorities are already considering how to regulate operations in digital coins, but for now, remains an escape to the controls imposed on currency transactions as, for example, the limit of five million dollars of international transfers.
The same phenomenon is reproduced in other emerging nations such as Malaysia, where demand for the ciberdivisa has also increased this year to 261%, according to LocalBitcoins, and other countries where their currencies have depreciated significantly against the dollar, as Japan’s second world power in terms of transactions with bitcoins is concerned- where the volume of transactions between Bitcoin and yen in March exceeded that recorded at the crossroads between the dollar and the yen.
In addition, Pavon also explains that in many of these countries the sensitivity of the yuan to devaluations of local currencies with the extremely high price volatility that arouse political news combined . “It was this year with the Brexit, when the exchange rate against the dollar soared $ 200 during the days before the vote on the departure of United Kingdom of the European Union (EU)”, explains the expert. He adds: “With the victory of Donald Trump, an increase of more than $ 50 were given”. Just over two months later, the strong dollar and the depreciation of local currencies, coupled with capital flight, have paved the way in which flowers bitcoin.
Cases of India and Venezuela
All these elements also must be added the desmonetizaciones that have taken place in India and Venezuela in the last two months and have caused a serious liquidity crisis in both countries. India’s initiative in seeking combat the underground economy by removing circulation banknotes of 500 and 1,000 rupees , which accounted for 86% of all cash available. The elimination of these bills triggered a massive shortage of funds in a country where most transactions are made in cash.
In Venezuela , since last December 11 citizens had 72 hours to get rid of the ticket 100 bolivars , which involved 77% of the total money in circulation in the country. The objective of this demonetization was fighting the mafias , who had been buying and selling bolivars in Colombia. Maduro’s government had to extend the deadline after the views and scenes were repeated India: lack of cash and protests throughout the country.
Two experiments that have had an impact on bitcoin, especially in Venezuela, which has increased speculation in bitcoins and ‘mining’ have dedicated themselves to save money to increase their price, says Pavon. Angel Leon, meanwhile, highlights that the Venezuelan case was special, since the beginning volume fell bitcoins, but quickly recovered to be considered a measure to protect the capital. Generally speaking, the number of operations in this digital currency has increased over 900% in 2016 in the Latin American country.
2017: The Great Year of Bitcoin, despite its weaknesses
The turmoil experienced in the financial markets in 2016 , which threaten to continue giving shocks to operators in 2017, increase the interest in bitcoin and criptodivisas , while distrust increases in local governments and in national currencies. For this reason, Pavon believes that next year , a rise of virtual currencies will live and speak increasingly of technology that supports them . “They will make a lot of noise , ” he says.
Various gurus have offered the most varied predictions about the price can reach bitcoin: from 1,800 to $ 1,900 that predict companies like SpectroCoin up to $ 4,400 that predicts Daniel Masters, director at Global Advisors Bitcoin Investment Fund Plc. And the firm Juniper Research predicts that bitcoin transactions will triple by 2017, reaching 92 billion dollars.
In addition, the sources believe that the time will come the big investment funds, which will begin to take seriously the bitcoin as a safe value, “which presents even more advantages than gold , ” said Pavon. In addition, the criptodivisa has a great quote in 2017 because it could be the year when finally the twins Tyler and Cameron Winklevoss -known by the legal battle against Mark Zuckerberg over the ownership of Facebook and inspired the movie ‘Network social’- can open the negotiated market -Exchange Trade fund (ETF) background – Gemini to virtual currencies. After four years in the hands of regulators, Leon suggests that “the entry of this fund bitcoin extend a multibillion dollar market as all Americans have access to digital currency.”
However, the founder of DiarioBitcoin.com stresses that the currency still has many weaknesses and suffers the threat of other currencies competing with the greatest potential, such as monero or ethereum . For Leon, bitcoin has taken too long to solve their scalability problems because ” the moment can only process an absurd number of transactions per second (up to 5 transmissions per second). Bitcoin must climb to at least 1000 transmissions per second to be taken seriously by big Internet, Google, FB, Amazon, Airbnb, Uber, etc “.
For this expert, the coin also has among its unfinished the expand to more users: “The day that tens of millions of people start using bitcoin will be much more difficult to manipulate its price , and if it stabilized then yes could become a safe haven. ” ” At the moment it is only a vehicle to move value from one side to another and as quickly as possible since volatility can wipe capital within hours, even minutes , ” says Leon
The facts speak for themselves and Bitcoin and other digital currencies are a good value to be taken into account … but in the future when no longer pasture volatility and pass to fluctuate pennies a day . That’s when they represent a serious alternative and may be regarded as a ‘safe haven’. León is currently still “far away” and, today, consider bitcoin as a “speculative” instrument. “Having bitcoins is a high risk investment; would not recommend anyone to put their savings in the criptodivisa, but only a portion of money they are willing to completely lose , “says the expert.