A huge week from virtual currency Bitcoin has speculators wondering just where it will head from here. Bitcoin, an online digital currency created by pseudonym Satoshi Nakamoto, soared to an all time high of $1866 this week. What exactly is driving the rapid growth in price and use for this online phenomenon?
A lot of people are just starting to hear about Bitcoin and what it can do now that its price has soared to a new all time high. Bitcoin was created 8 years ago by an anonymous individual who had a dream of a nearly anonymous online currency with a fixed maximum amount. As opposed to the currencies of the governments of the world, Bitcoin is limited to how many will ever exist. This creates a rarity that has helped drive up the value and created interest from all corners of the globe.
Bitcoin is also a convenient means of storing wealth for some. You could conceivable store any amount of Bitcoin on a smartphone or hard drive and travel with it, if you desired. That’s not really the case with cash, gold, or anything else. There are a number of Bitcoin exchanges where people can buy Bitcoin and it is now accepted by thousands of merchants worldwide.
What’s Driving the Surge?
A number of factors have coincided to help Bitcoin continue its upward march. Some feared that the government’s decision not to approve the Winklevoss twins Bitcoin ETF would doom the currency’s growth. In fact, it has continued to increase in value steadily since then.
Government regulators are starting to come around on the virtual currency with Japan recently approving it as a legal means of payment, China working towards making it a legitimate means of payment, and a Federal Reserve board member speaking highly of it. In addition to government regulators working toward including Bitcoin as a legitimate currency, the number of users has increased dramatically. As more people become aware of Bitcoin, more users join the network every single month. This is all before Bitcoin is even considered to be “mainstream.” It’s still not used in every day life for most people, and many people expect it to increase in value substantially even from this point.
It’s not very often that you see an asset go from $0 in value to $1866 in a period of only 8 years, but that’s exactly what’s happened with Bitcoin.