Bitcoin: The Journey So Far, and The Future Ahead
A brief insight into the ever changing value of the cryptocurrency
Having experienced an uncertain rise and fall in its value over the month of October, the value of bitcoin suddenly shot over the last weekend in October and continuously rose to an all-time high of 1BTC equals $7,234.00 (GHC 35,771). It is at $10019.80 (Source) at the time of this writing.
Being one of the most volatile assets in history, it’s difficult to keep track of what actually influences it’s value, yet this increase can be narrowed down to the anticipation of a hard fork in the crypto world.
A hard fork to issue out a new cryptocurrency by name segwit2x as expected on 15th November, 2017 caused an increase in the demand for BTC tokens during the period, since owners of the tokens prior to the fork would have theoretically been holding double the amount of tokens accumulated in their cryptocurrency wallets(one copy in each fork).
Remember basic Econs where an increased demand for a scarce commodity raises its price to an abnormally higher rate? Yes that’s what happened to the BTC!!! (Prior to the cancelled fork).
But wait, did it end there? NO! Clearly the anticipation of the segwit2x was not the only independent variable influencing the price of bitcoins hence beyond the month of October, the bitcoin value has shot up to a whopping $9000 and above. This new high, though not in absolute terms, can be attributed to the allowance of select customers by leading United States Payments Company Square Inc. to buy and sell bitcoins on its Cash app.
Also, Retail investors as well as hedge funds family offices piling into the market can be taken into consideration, hence the realization that the demand for this limited currency continues to increase beyond the current supply and will continue to outweigh the supply putting more pressure on the price to rise up, due the limited number of Bitcoins that can be possibly extracted.
With the market capitalization of all cryptocurrencies hitting an all-time high of over $300billion on Monday 27th November 2017 (according to trade website Coinmarketcap), we may yet be experiencing the most explosive financial bubble in history.
With its value haven increased over 1000% in the year 2017(from an average of $900 in January to above $9000 in November), is it likely to experience a hard fall before the highest number of bitcoins permitted to be mined (21million) are extracted; or are we experiencing the beginning of yet the most explosive financial asset in years?
Source: Nana Ekow Okusu