Year 2017 started with the Bitcoin price above $1,000. Many see Bitcoin to reach $3,000 at the end of the year.
The increase in the Bitcoin value can be due to the massive numbers in adaptability rates in countries with devaluing currencies. It is also the result of bank’s interest in Blockchain technology.
Impact of the devaluation of currencies to Bitcoin
The main factor to the rising value of Bitcoin is the economic instability in certain countries. China, Venezuela, and India are three examples. They are currently facing a financial crisis where the value of their currency is dropping.
People in these countries are looking to retain the value of their investment and savings by using Bitcoin to convert it to another country’s currency. Having to convert local currency to a foreign one usually involves a high bank or exchange fees. Bitcoin is a tool to bypass these fees as well as other disadvantages in direct fiat money conversion.
People simply buy Bitcoins in their local gateway or Bitcoin exchange using their local currency. Once they have the coins, they can enter a foreign gateway or exchange site to turn the money to a different currency.
Because of this, there is an increase in demand for Bitcoin in financially troubled countries. High demands can push the value of Bitcoin. Bitcoin value is likely to increase when more currencies collapse in 2017.
Attraction of banks and big businesses to Blockchain
Banks and businesses see Bitcoin in a negative light. Many banks have shut down any accounts of Bitcoin startups or businesses that are accepting bitcoins. But there are also a few brick-and-mortar businesses that accept Bitcoin payment.
Accepting Bitcoin can be expensive and risky for banks. Certain countries require banks to identify the people who transact with the bank’s customers. This is a problem for banks since anyone can buy Bitcoin without using any personal information.
There is also the issue with Bitcoin considered as ‘e-money’. In some countries, this places Bitcoin outside of the jurisdiction of the regulatory offices of certain countries. Banks would need to be the one to regulate any Bitcoin transactions. This would result in additional time and money expended for the banks.
Despite the negative views on Bitcoin, banks and business have a high interest in blockchain or the technology behind Bitcoin. A blockchain is a public and visible ledger that is transparent to anyone than a physical bank ledger. Transactions done through the blockchain are automatic and do not require a middleman.
Interest in cryptocurrency can increase as banks invest in the research of Blockchain technology. This can lead to high adaptability rate which can also result in an increase in Bitcoin value in 2017.