When June started, Bitcoin prices started surging upwards. A lot of people said that this was just one of the Bitcoin price fluctuations, but the first week saw the price rise only higher. The surge became even more noticeable as it entered the second week.
Last Friday, the prices were holding steady at around $570. Over the weekend, though, the Bitcoin price suddenly rocketed upwards. By the time Monday trading started, Bitcoin prices were past $600 and have quickly continued to rise.
Right now, Bitcoin prices are the highest they have ever been for two years. Furthermore, the price is still rising. As of June 14, prices were only a few dollars away from the $700 mark.
Many analysts have speculated on the reason for Bitcoin price surge. At its heart, the rise of Bitcoin prices means that there has been an increase in demand of Bitcoin. Continued buying is what will drive any currency’s price up in the open market. The current surge in Bitcoin prices indicates that people want to get their hands on Bitcoin right now.
There could be several reasons for this hunger for Bitcoin. The first reason has been the drop in the Chinese yuan’s price. Bitcoin trading is one of the few ways in which Chinese investors would be able to secure their wealth. With China’s strict capital controls, it is very difficult for them to ensure their money does not get reduced in value.
Bitcoin is one avenue that has proven to be popular and easy to get into. The initial buying by the Chinese only primed the pump, though. US and Euro buyers have joined the buying frenzy, driving Bitcoin prices even higher.
Another reason for the surge in Bitcoin demand is the potential halving of Bitcoin rewards in July. Bitcoin was designed to have an upper limit unlike fiat currencies that print money on demand. Limited supplies mean increased demand. People are scrambling for Bitcoin when the inevitable crunch comes.
A more geopolitical reason for the rise in demand comes from Europe. With the potential exit of Britain from the EU, there are potential negative effects on the regional economy. People seeking to protect their investment may seek to convert them to Bitcoin. Bitcoin’s non-dependence on any government makes it immune to the possible disruption that Brexit can cause to the world economy.
What worries people now is the possibility that the rise of Bitcoin price could just a bubble. People could potentially be buying bitcoins to dump them into the market at a later date, hoping to profit from the higher prices. Just like people wanting more bitcoins can raise prices, having a glut of bitcoins on the market can bring prices down quick.
People are cautiously optimistic, though. With the current market forces in play, it is possible that the current price rise may stabilize into a higher normal price for Bitcoin.