Bitcoin is starting 2017 from a position of strength with gains straight out of the gates as the markets opened for trading in 2017. 2016 was a mixed year for Bitcoin traders and investors as the cryptocurrency alternated between exciting highs and gut wrenching lows even though we had more gains than losses. 2017 is already shaping up to be a massively bullish year for Bitcoin traders and investors.
On Monday, January 2, 2017, Bitcoin built enough momentum to cross the $1000 milestone once again after it reached a 3-year high of $1,033. On Tuesday, January 3, 2017, Bitcoin showed that the gains in first trading day of the year were here to stay. As at market close on Tuesday, Bitcoin was already up to $1,062 as it moves towards its all-time high price of $1,216.70 that it recorded in 2013.
Here’s why Bitcoin is soaring
Bitcoin’s start in 2017 is interesting because it crashed as low as $200 in 2015. In 2016, Bitcoin started the year at around $400. Now, Bitcoin is starting 2017 above $1000 and it trades about 140% higher than its 2016 starting price. Without much ado, 2017 could turn out to be the year that the Bitcoin and blockchain technology gets mainstream adoption for finances.
The first reason behind the upsurge in Bitcoin prices is the increased interest in the cryptocurrency as fiat currencies start to falter in some economies. For instance, Bitcoin is becoming the go-to currency in Venezuela as inflation continues to erode the value of its currency.
In India, the Modi administration has removed the highest denominations from circulation as part of efforts to curb corruption. The removal of large bank notes has a negative effect on trade; hence, Bitcoin is moving in to fill the void.
In China, the wealthy top percentile is using Bitcoin as a measure to evade the government’s tight rein on money transfers. Beijing is very strict on how people can move money in and out of the country but Bitcoin provides a better alternative to the Yuan and USD.
What does the rest of the year hold for Bitcoin?
An objective analysis of the impressive start that Bitcoin has this year shows that speculative trades are fuelling a part of its bullish rally. To start with, the trend towards isolationism in the global political landscape suggests that fiat currencies are at risk of being caught in the crosshairs of an economic cold war. In contrast, the global decentralized nature of Bitcoin suggests that investors would be better served holding Bitcoin than holding other fiat currencies.
Vinny Lingham (@VinnyLingham)CEO of Civik Key and a Shark on SharkTanks notes that Bitcoin could reach $3000 this year because of increased interest in the cryptocurrency. In his words “the faster new money flows into Bitcoin, the quicker old money flows out. Slow & steady stores value. $3k should be our MAX target for 2017”.