The price of a bitcoin is over $1,000 again for the second time in less than a month. Coinbase data indicates that a bitcoin was trading for $1,016.37 or $1,021.59 on February 3, 2017.
That means bitcoin has recovered most of the value it lost when after the People’s Bank of China (PBOC) began investigating bitcoin exchanges in January. Bitcoin reached a high price of $1,069.40 on January 4, 2017, only to fall to a new low of $822.05 on January 11.
Since then the world’s most popular cryptocurrency has steadily regained most of its lost value; because news reports indicate little or no hostility to bitcoin on the part of the PBOC. This looks like organic growth to me and there might be no end in sight.
What is Pushing Bitcoin’s Growth?
The big factors driving bitcoin’s growth are the mounting fears about currencies. The shaky nature of fiat currencies was brought home last year, when Indian Prime Minister Naranda Modi abruptly demonetized the two largest rupee notes.
Other events including Brexit, the Trump election in the United States and the speculation about the collapse of the European Union are sowing doubts about currencies. The sudden drop in the value of the Yuan and the lack of meaningful economic growth in Japan are not helping matters.
All this is driving people to hedge and more importantly to look for a hedging mechanism they can use for every day transactions. Bitcoin fits the bill there, particularly since it can be used to make purchases online, used to get cash from ATMs and even used to buy Walmart or Amazon gift cards.
How Trump and China are Driving Bitcoin
China is ground zero for bitcoin adoption, and its use there is likely to skyrocket. That nation’s already lousy economy is being hit with speculation about a trade war with the U.S., Chinese official newspapers are not helping with lots of articles attacking President Donald J. Trump.
Another person helping bitcoin is Alibaba’s Jack Ma; who has been telling the media that China’s economy is about to get far worse. Ma has even told some reporters that he thinks a trade war is unavoidable.
Some of Trump’s other actions; such as blocking access to the U.S. for some refugees and travelers, also drive bitcoin usage. People who are afraid they cannot travel to the U.S.; or journey to see relatives, will be more likely to use bitcoin to move money.
Expect to see bitcoin prices surge again in the next few months. A bitcoin price of $1,500 or more by summer is highly likely particularly if political instability keeps growing.
French Presidential Election could drive the Next Big Bitcoin Price Spike
The next big event that will drive bitcoin prices is the French Presidential election which is scheduled for April 23. The front runner is radical nationalist Marine Le Pen who may try to take her nation out of the Eurozone. Also doing well is Socialist Benoit Hamon who is pushing a radical agenda that includes universal basic income.
Hamon surprised observers by easily winning a landslide victory over front runner Manuel Valls in the Socialist Primary. The election of either Le Pen; or Hamon, would throw Europe into chaos and send millions of Europeans to the bitcoin exchanges. Expect to see bitcoin prices go up by 10% or more if there’s a presidential surprise in France.
There is a strong possibility that bitcoin prices will stay over $1,000 this year and possibly go far higher. Many bitcoin traders and speculators are going to make a lot of money this year if they ignore the skeptics. Something to consider is that Coinbase reported that those who bought a bitcoin on February 3, 2016 and sold it a year later made a profit of $619.56.