Bitcoin price breaking through the roof became a hot topic for the financial markets around the world in the last few days. And as it breached the $10,000 barrier on November 29, the internet exploded with a discussion on the topic.
Everyone wants to talk about it—the discussion contains sentiments of celebration along with predictions and even some not-so-favorable opinions about the cryptocurrency’s recent and sudden boom.
Unprecedented Bitcoin Price Being Quoted
The remarkable thing about Bitcoin or BTC, as its trading nomenclature is understood, is the phenomenal growth it has clocked since it came into being seven short years ago. It was then traded at just seven cents each.
Then, the first couple of months of 2016 witnessed volumes being written about the Bitcoin price having doubled from around the $1,200 mark at the start of the year to approximately $2,400-2,500, just within a month or thereabouts.
Also during that time, there were doomsayers who felt the digital currency is purely speculative in nature and is being played up by some unscrupulous traders with ulterior motives.
Such commentators are now dumbfounded as BTC has not only touched and crossed $10,00; it went even further to $11,000 before dropping back by some percentage within the last day or so.
Many “I Said So’s” But Some Still Critical
Interestingly, there were some analysts who had clearly foreseen Bitcoin’s rising trade value to $10,000 and above as early as in October this year.
Michael Novogratz, a former hedge fund manager, was the one of the first to make this prediction on CNBC in October. Then, he said the skyrocketed growth would happen in six to ten months, but it did not take more than a month for it to happen.
Latching on to this, there are some overenthusiastic folks who say the Bitcoin price could go to such unprecedented levels as $40,000, but that could be a bit farfetched.
Other folks of the opinion that the digital currency could soon fail are led by JPMorgan Chase CEO Jamie Dimon, who maintains Bitcoin is actually a “fraud.” There are others who foresee a bubble burst sooner or later.
What Explains This Latest Surge?
One cannot deny that Bitcoin has gained overwhelming acceptance from many quarters, and its estimated total worth (or market capitalization) is around $200 billion.
The die-hard BTC supporter feels even if it is able to drag just a very small portion of the conventional currency’s assets of $200 trillion, it can pull a big punch and the traders in the cryptocurrency may be hedging against such factors.
But the more reasonable explanation for this sudden spike in the Bitcoin price is the listing of Bitcoin futures for trading on the Chicago Mercantile Exchange (CME).On December 1, CME made an announcement that the launch is set to happen on December 18. As a result, many investors who might not have previously taken positions in the digital currency would have jumped in the fray in order to capitalize on the value growth.
The coming days could lead to a more balanced value, probably just before another similar surge. Judging by recent trends, the Bitcoin price point could be around $14,000 quite soon.
Other Currencies Have Benefitted Too
There are also reports which suggest that apart from Bitcoin, other names in the cryptocurrency basket have also gained significantly—in terms of their market capitalization value during this period.
The figures being quoted are from $17.9 billion to over $300 billion. Even Bitcoin Cash, the split currency from the Bitcoin “hard fork” which occurred in August, has seen its price jump from just around $500 some months ago to the levels around $1,500.
Another interesting fact that is worth being understood is that the trading of Bitcoin versus the U.S. Dollar (USD) constitutes only 20 percent of the overall market. Bitcoin trades against the Japanese Yen and other currencies like the South Korean Won, as well. It is learnt that the Bitcoin-Japanese Yen trade is actually as high as 61 percent.
Bitcoin price may still gain traction in the coming months if there is wider acceptance of the currency in transactions. There is also the recognition by the government or the Federal Reserve authorities in major economies. Until these two factors come to fruition, the unreliability tag will likely continue to remain with Bitcoin.