Last Friday, Bitcoin hit $903, its highest level since November 2013 when it hit $979, according to CoinDeskindex.
Between November 2013 and January 2015, the digital currency stabilized but has been gradually rising since then.
A yearly increase of 54% seen by cryptocurrency in 2016 outdoes all unvarying currencies as per Bitcoin.
Here are some of the reasons why digital currencies work so well:
It is a safe asset. Bitcoin rose 4% overnight after Trump won the US presidential election, leaving the Dow Jones, Nasdaq, and all major European markets behind. Bitcoin is like precious metals and art, a decentralized asset that doesn’t correlate with the stock market. It also benefits from being a decentralized currency that is not tied to any particular country’s political actions.
New Bitcoin products have calmed investors. These include the Winklevoss brothers’ bitcoin ETFs and the blockchain hedge fund Polychain’s investing solutions. As a safe investment, these items help Bitcoin. Last Wednesday, Lisk, a bitcoin and blockchain platform, announced further liquidations. Coverage and exposure have increased. Bitcoin wallet Blockchain, based in London, announced in November that it would have its busiest month yet. Circle, a US-based bitcoin money transfer platform, has announced a major business model change. Such media coverage will assist the people to understand the misunderstood asset.
The continued development of Bitcoin will rest on the aspects that have provided to its success so far. However, more and more investors may drive to the asset as cryptocurrencies become more available and popular. But, much of the recent Bitcoin success fuels by doubt about events like US elections and Brexit.
A final deal may impact Bitcoin’s momentum once Trump takes office and Brexit talks begin. Whether investors use the asset-based on merit or merely reacting to geopolitics will depend on Bitcoin’s future performance.
Fintech firms have an interest in Blockchain, the technology behind Bitcoin and other cryptocurrencies since it can modernize and streamline processes. Santander claims this technology could save up to $20 billion annually by 2022.
Due to the blockchain’s decentralized nature, several parties can send and keep sensitive data in an easily accessible location. This streamlines complex financial processes including wire transfers, cross-border transfers, shareholder management and ownership exchanges, and stock exchanges. Beyond banking, governments and the music business are exploring the potential of record-keeping systems.
Blockchain use cases currently developing and testing by both venture capital and financial institutions. On the other hand, more than 50 big financial institutions have supported blockchain businesses or co-founded them.