For the first time in a year, bitcoin value soared by about 50% to $500 last week, indicating a sharp rise in interest around the globe. With prices for the digital currency lingering below $200 for much of the year, the recent surge tells us that bitcoin is here to stay. With more merchants and consumers becoming aware of digital currencies, it’s becoming increasingly apparent that we are headed in a new direction when it comes to how people obtain and spend their money.
Behind the Bump in Bitcoin Value
Since it started to achieve mainstream popularity, bitcoin’s dollar value has been volatile. Prices for bitcoin started at just a fraction of a cent, and in 2013, exploded to over $1000 per coin. Since then, bitcoin has seen a number of ups and downs, with values hitting as low as $100 at times.
However, in recent months, the value of bitcoin has seemed to stabilize. As consumer interest grows and more doors are opened for bitcoin trading, the digital currency has almost begun to regulate itself. While the recent unpredicted jump is certainly good news for investors, it has left many wondering what caused such a drastic increase in value. There are a few explanations we can assume catalyzed bitcoin value.
The first reason lies in China. Interest in digital currencies has expanded greatly in Asia, particularly in China, home to one of the world’s largest e-commerce economies. As the value of the Chinese yuan is dipping, many Chinese consumers are turning their attention toward alternative methods of spending money. With a sudden number of people investing in bitcoin over a short period of time, it makes sense that the value of bitcoin would rise respectively.
Another possible reason is an increased interest in blockchain, a technology vital to bringing bitcoin into the mainstream. Blockchain consists of the ability to record all bitcoin transactions in a kind of digital ledger. Because bitcoin transactions were untraceable in the very beginning, the currency was often used to exchange illegal goods and services. As proponents of bitcoin continue the push towards legitimacy, a technology like blockchain could help bitcoin’s reliability.
Last but not least, a recent ruling by the European Union has launched bitcoin on the path to widespread public acceptance. Now ruled as tax-exempt throughout Europe, bitcoin users will not have to pay taxes for holding digital currency. It was an important win for the bitcoin industry, and has paved the way for more merchant and consumer interaction with the currency.
Finding Your Way to Better Bitcoin Services
As the bitcoin industry continues to take off and change the way we use money online, now is the perfect time to get involved. Consumers can start purchasing bitcoins for their own use at any time, and merchants can actually obtain a special merchant account to accept bitcoin payments in return for their products. Check out our bitcoin merchant accounts if you’re interested in accepting digital currency payments on your website, or keep checking back on the Instabill blog for more industry updates.