Analysis of the Bitcoin Mysterious Rise above $5000

Written By Janice Doughtrey

Bitcoin has thrived upwards in value in a span of less than two years by more than 700%. Rising from a value of 970 to above $5000 in less than two years is an abnormal occurrence in the currency market. It should be good to analyze the rise and the face of the cryptocurrency in the near future. It should be noticed that the rise during the short period from last year has not been steady rather it has been volatile. The bitcoin holders may be enjoying the currency value but still may be risking much as the future is unknown.

Bitcoin use and transactions have seen a huge blow from various central banks in different states. In China, the use of the bitcoin was stopped by the central bank late last year an event that saw the value of the bitcoin drop to around $3000. The use of cryptocurrency has been interpreted by several central banks and world bank as one of the avenues where fraud and illegal transactions are conducted. The central bank has also termed bitcoins as an avenue for the evasion of tax, and thus an illegal avenue.

In essence, the rise in the value of the cryptocurrency should be brought about by the increase in the demand for the bitcoin. The demand, however, seems to be very high beyond explanation. It should be acknowledged that the bitcoin value is determined solely by the demand and supply forces of the currency and thus there are no statutory laws governing the bitcoin. It should thus explain the volatility of the bitcoin in the market. Most acknowledged investment experts have tried to investigate the theory behind the high rise of the bitcoin in vain as they term the short-term value rise as mysterious. They, however, still note the business as a very risky one terming that the possibility of the collapse of the value of the bitcoin is very high.

Some of the presidents that include the Russian president termed the bitcoin use as risky and called for the intervention of the same. In their defense, they stated that these avenues have always facilitated funding of the terrorists, money laundering, and fraud among other unethical activities. The Russian president also warned about how the cryptocurrency has been given so many restrictions thereby boosting its demand and hence its value.

It is worth noting that some key developers are accepting the use of the bitcoin as a way of paying deposits, despite the high warnings and restrictions of the cryptocurrency. It should also be noted that the Japan authorities are implementing rules to accept the use of cryptocurrency as a mode of payment. Other celebrities that include Mayweather have continued to support and promote the cryptocurrency. Most of the monetary analysts argue that there is no need of using the bitcoin as it is very risky in an epoch where there are numerous ways of currency transfer. They term the currency as a fraud that will eventually collapse. The future of the cryptocurrency remains unknown and volatile.