Top Reasons Why Bitcoin Surged in 2017

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Talk to every investor who has made fortune from trading or investing and they will tell you their mantra – Buy When Everyone is Selling and Sell when Everyone is Buying.

Most of these gurus will also ask you to avoid investing out of desperation. As the big daddy of Blockchain technology and cryptocurrency, Bitcoin, crosses 11k mark, there is a craze going around the coin. Every Tom Dick & Harry we meet is looking to invest in Bitcoin.

There are people who are giving targets of $40,000 in less than a year while others are betting for $100,000 in few months.

Really?

Well, one thing is sure, Bitcoin has gained an unprecedented attention from the investor community. Those financial organizations and their bosses made fun of the coin till a few months back terming it as a teenage obsession, are now coming up with Bitcoin funds.

There are a number of reasons why Bitcoin skyrocketed in the last few months. Some of the reasons include:

1. Demonetization in India:- Although there are not many “official” indicators to prove this, but there are data to support this claim. On 8th November 2016, Indian Prime Minister Narendra Modi demonetized two largest denomination currency notes comprising 86% of the total cash to fight against black money. People were given 50 days to submit their currency to banks and get the new notes.

India faced (and is still facing) a huge problem of black money and a considerable number people work on cash to avoid any tracking and eventually save tax. This money was invested in places like real estate which again dealt in a lot of black cash thus inflating prices of houses and apartment to the 13th floor.

Now with demonetization, the cash economy in general and the black economy, in particular, got a blow. It is an obvious fact that all-cash transaction is not black but most (almost all) black transaction is done with cash. Although the black money mafia and their supporters in media and the self-proclaimed intellectual circle did their level best to demean it, what they came out turned out to be a corrupted logic.

With such a scenario, many people who had cash managed to put the money in bitcoin which happens to be anonymous in nature. A host of agents helped people to convert their cash money to bitcoins without the need of KYC, a mandate by RBI.

Bitcoin price since November 2016 surged from $700 to $11,000. The prices have seen an unprecedented hike since demonetization as is clearly visible from the chart below:

2. Japan Legalizing the coin:- Somewhere around in April 2017, Japan legalized the currency, giving it the much-needed boost. This triggered the market cap of Bitcoin to an unchartered territory of 1 billion dollars. While China played ping pong deciding whether or not to legalize Bitcoin, Japan’s stamp boosted the morale of the bitcoin miners and investors alike.
Read: Japan & South Korea Drive Up Bid For Bitcoins

3. Famous faces:- Many famous faces like John McAfee (founder of McAfee anti-virus, which was later sold to Intel) have openly supported the coin and are big-time investors. Even artists joined the chorus. Futuristic artist and famous singer Bjork gave her thumbs up for Bitcoin and Audiocoin for her recently released album.

4. South Korean interest:- South Korea entered into a passionate love for the coin this year when the markets for bitcoins were opened up there. Many people joined the Bitcoin bandwagon this year. The frenzy of the coin in this country can be realized from the fact that while the world over the price of Bitcoin is $11,000, South Korean exchanges are already trading it at a premium value of $12,000.

5. Indian Craze:- Even if we leave aside the demonetization effect, the Indian millennial got beaten by the bitcoin bug in recent times. As per the statement of ONE of the bitcoin exchanges, Zebpay, they are adding 2500 new customers every single day! This statement was a couple of weeks back and the number is increasing at an accelerated pace. If we add at least 4 exchanges, the numbers are impressive. There is a massive interest among the Indian youths for bitcoins.

Anticipating this, another coin RUPEE Cryptocurrency, which claims itself to be the BITCOIN OF SOUTHEAST ASIA, revived itself this November and has huge plans for the Southeast Asians with a special focus on India (Disc: I am invested).

6. De facto coin for trading:- Another huge reason for the surging price of Bitcoin is that it is defacto coin for trading other coins. For the beginner, there is not just one cryptocurrency but over 1200 currencies like bitcoin which can be traded/invested into. Most of these coins can be traded against USD. So, for instance, a person has to buy another coin Rupee or Redd coin or Viuly token, s/he needs to first buy bitcoin and then can buy the desired coins (although trading against fiat currency like USD is allowed by a few exchanges, the volume is less)

7. Acceptance: Bitcoin is accepted at many a places and merchants. This has also increased the confidence of the investors and eventually surged prices.

8. The Amazon Domain?: There are rumors that e-commerce giant Amazon is planning to get into the cryptocurrency. Although this news is not confirmed the rumor itself was sufficient to add oil to the fire.

9. Confidence in technology: People in the finance and technology circles may find Bitcoin legitimate or scam or hype, but almost everyone has given a thumbs up to Blockchain, the technology behind the coin.

An ardent observer of life’s visual rhythms & curious on the SOEs that take place in the cosmos, I jot down my mind occasionally on yet another universe of the Internet.

An Engineer by profession and nationalist by heart, I write my heart and mind on anything and everything that comes to my way. I put my ideas on politics, religion, technical, green energy, stock markets, spirituality, open source, business and anything under the God’s green earth and above that too 😉

Being a Jack of all trades, I have my say on varied subjects 🙂

Some of my articles are also published in http://articles2read.com/author/ankur-mehta/

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