The price of Bitcoin reached its highest value since 2013: $1,000 at the start of 2017. The currency’s value increased by over 120 percent last year. Traditional non-digital currencies ranked behind Bitcoin. Demand skyrocketed in China and increased its value. Chinese bought the digital currency as China’s renminibi fell in 2016.
15 million Bitcoins circulate around the globe. Developers add several dozen more every hour. The total value of them all? About $16 million.
But this was not always the case.
The currency’s wild value fluctuations occurred since it arrived eight years ago. The crypto-currency has been as low as $400 and as high as north of $1,000.
Bitcoin employs peer-to-peer technology to decentralize transactions. That means no central institution or bank. The Bitcoin network handles the transactions and issuance of bitcoins. In other words, the crypto-currency is open-source and public.
Individuals transact on mobile devices. A two step scan-and-pay system carries out the payment. Users only need a QR code in their wallet app. Fees come into play only when sending bitcoins. Receipt is free.
The currency’s most popular feature remains its anonymity. It is difficult to track bitcoins. People receive/send money without revealing their identity.
No doubt these features drive its popularity. On Wednesday, the crypto-currency rose over 10 percent higher to $1,127.48 per coin. Gains came in at 17.8% for 2017. Astonishingly, the currency is up nearly 100% since September 2016; Bitcoin rose 123% for all of 2016.
China Drove Bitcoin Demand
Interest in Bitcoin climbed due to interest from China. Money left China and ran right into the arms of the crypto-currency. According to Business Insider:
“In the first 24 hours of the new year, over 5 million bitcoins were bought in Chinese yuan, equating to $3.8 billion. In contrast, just 53,000 bitcoins were bought in US dollars.”
Other countries around the globe use the crypto-currency more than ever. We reported Venezuela’s increased adoption rate after its currency, the bolivar, fell sharply. Bitcoin filled the gap. In fact, Venezuelans prefer the digital currency over bolivars. The public believes Bitcoins provide financial safety. For instance, one Bitcoin equated to over $600 USD three years ago. That translated to 40,000 bolivars. Nowadays exchanges value bitcoins at seven-figures in Venezuela.
Furthermore, the country’s people credit the currency for their survival. Truly. Venezuela remains in economic crisis. We reported last month about Venezuelans who benefited from Bitcoin.
One user, Eli, a 33-year shoe store owner, said he uses the digital currency to buy medicine for his mother’s bone cancer. He sells bitcoins to a friend in Colombia who buys cancer treatment and medical supplies when he comes to visit.
“Treating my mother’s cancer would have been very difficult without using bitcoins because my business is going bankrupt and I have a lot of debts, so bitcoins enabled me to stay afloat while our currency is collapsing,” said Eli.
Though not as bad, China’s economy slumped in recent times too. Other nations with weakened economies increased their Bitcoin usage.
Experts do not expect the outflows of money from China to stop anytime soon. Likely, Bitcoin’s popularity will increase in other countries with economic strife.
Source: Business Insider