There had been plenty of bad news in the cryptocurrency market over the last 6 weeks. But things are looking better now. Over the weekend, Bitcoin’s value crossed $11,000. Not bad for a currency that had lost 70% of its value by early February. But what is the cause of the present rise in Bitcoin price?
Bitcoin started 2018 in a frenzied state. It had soared all throughout 2017. Its price had risen from $1,000 in January to $19,000 by early December; though with intermittent crashes in price.
Cryptocurrency traders got the hint that 2018 would be a tough year. With a flurry of regulatory agendas on the cards, Bitcoin investors (speculators?) took flight. Since mid-December, Bitcoin has lost a huge chunk of its value.
Importantly though, currency regulation has been a top agenda in important countries like the US, Russia, South Korea, Japan and China.
South Korea and China began restricting trading, banning anonymous trading accounts, and placing age restrictions on some trading platforms.
On February 6, Bitcoin’s value dropped to $5,947. That represented the lowest the currency has dropped since September.
But it has since recovered some grounds. Bitcoin’s price has been growing gradually since it witnessed the massive selloff in early February. Last Thursday, Bitcoin’s price rallied and crossed $10,000. And on Sunday, it shot pass the $11,000 mark for the first time since January.
Why Is Bitcoin Rising Again?
As usual, nobody can say for sure what is causing bitcoin’s value to rise. Some analysts are speculating that the current growth could be owing to a reduction in regulatory concerns.
The price of bitcoin is back over $11k
— CoinDesk (@CoinDesk) February 19, 2018
In markets like South Korea, new government regulations have turned out to be less strict than many people feared. The Russian government introduced a new legislature on cryptocurrency trading last month, but it contained no discouraging laws against cryptos.
And in the US, regulatory worry eased as important US regulatory bodies gave a positive view on cryptocurrencies. Head of the US Commodity Futures Trading Commission (CFTC), Mr Christopher Giancarlo, advised that regulators should have a “thoughtful and balanced response and not a dismissive one.”
These positive events are definitely important to the present growth in Bitcoin’s value. But of course, the volatility in cryptocurrency trading is the main reason why the industry is looked upon with suspicion.
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