The fact that the Bitcoin price is moving up so fast surprises cryptocurrency and Blockchain experts. We know that Bitcoin is a promising investment tool, yet the price has doubled in just half a year, from $850 in December up to its latest maximum of $1,750 in May. Could good news like world governments accepting cryptocurrency play a role in the Bitcoin and altcoins price race? Or are we observing another ponzi scheme? Should we expect corrections soon?
One of the main drivers of the Bitcoin’s recent sharp price rise is Japan and the decision of its government to recognize Bitcoin as an official payment method starting in April 2017. Thousands of shops in Japan began accepting Bitcoin for their goods and services.
And a Bitcoin price race began:
Rob Gonzalez, CEO at UTXO, a company that sells mined BTC from the USA, and Prototype Engineer at LocalBitcoins.com, commented to Coinidol:
“Japan is the real reason for the price increase right now. Over half of the trading volume is in Japan.”
John MacPherson, Compliance Manager for Wall of Coins, a P2P Bitcoin and Dash exchange by Genitrust, Inc. commented that the price for Bitcoin seems to be too bold now: “I expect we will see a correction soon. I’m sure Japan has a huge part in the BTC pump itself.”
However, not everyone in the crypto community believes that such news could influence that rapid a growth of Bitcoin price, which continues to date.
Rob Gonzalez noted:
“This price doesn't seem right to me. I think the exchanges are doing this, for example, Bitfinex and Mt Gox to pay off the debts, then the price will fall. The price of $1700, $1600, $1500 even with positive news it's just too high and too fast.”
Kumar Gaurav, CEO and Founder of Cashaa, a blockchain-based peer-to-peer marketplace and cash-to-cash remittance company, also commented:
“I understood that Mt Gox explanation sit well for bitcoin, which is in pure way limited resource. While others are too small to be said that. Either people really doing it or a huge PUMP and DUMP scheme is happening.”
Lately, not just Bitcoin but also altcoin prices are growing rapidly. John MacPherson stated to Coinidol:
"It’s probably because Bitfinex had stopped BTC withdrawals, so people were liquidating into other altcoins that could be pulled out. And that would raise the price on most big altcoins because traditionally if BTC goes up, altcoins go down unless the same amount or more of money was flowing into the alt to keep it afloat. It literally has happened every time an exchange has stopped withdrawals.”
However, Bitfinex recently announced that it will have a comprehensive balance sheet audit completed by Friedman LLP. This audit should help Bitfinex dispel the rumors about its possible bankruptcy due to the fiat withdrawals suspension and redemption of its outstanding BFX tokens.
Rob Gonzalez, CEO at UTXO, also noted that another change in ruling, for example by the SEC, may have a tremendous effect on the Bitcoin price:
“Expect a correction of some amount here soon but, if for some crazy reason the SEC changed its ruling on the 15 of this month, expect and huge gain. Either way... expect $3,000 during this year.”
Countries like Russia, that plans to change the current attitude towards Bitcoin and Blockchain, or Australia, that is going to drop double taxation on digital currency purchases, may lead to another price boom.
Adam Davies, a consultant at Altus Consulting, has predicted before that the price of Bitcoin could hit $3,000 by the end of the year. He stated: “In terms of price this year, I think it will go up to $3,000. As it becomes more pervasive and more generally accepted, I think you'll see rapid growth in adoption."