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2017 has begun with Bitcoin making a huge comeback. Bitcoin price broke the $1000 level and looks like it will continue to rise over the coming months. It wasn’t long ago many experts were doubting the feasibility of bitcoin with all the regulatory hurdles and the reputational issues bitcoin still faces. Bitcoin transactions can occur without standard AML (Anti-Money Laundering) checks. This allows bitcoin users to operate with a level of anonymity and the potential for use by terrorist organizations or criminals. It has been well documented that many bitcoin transactions happen on the “dark web”.
Much of the recent move for the rapid rise in bitcoin price has been attributed to China. Bitcoin has proven to be a highly attractive asset class for Chinese investors. Other markets that showed strong bitcoin volume include Japan, Venezuela, South Korea, Malaysia, and Russia. Some of these countries like Russia have yet to determine the legality of bitcoin trading but this has done little to slow down the trading volume.
There have been some recent changes in bitcoin mining as well. The award for solving the complex mathematical formulas now result in few bitcoins being provided which has dramatically reduced supply.
Political instability and a contentious election also led to the rise in bitcoin price in 2016. 2017 doesn’t look to be any different with a great deal of uncertainty with a Trump administration and how the UK will handle Brexit.
China will be the key factor in the 2017 bitcoin price. Chinese regulators could step in if they feel the bitcoin market is getting out of hand. There is also some downside risk with the direction of regulators in the United States and Europe. Regulations aside bitcoin is here to stay and it is certain that newer and more markets will emerge in the coming months and years.
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