Bitcoin’s surging price is surely making a lot of people happy while throwing some other people into deep cycles of regret. The cryptocurrency is currently trading for over $4,100 a coin, having broken the $4,000 mark on August 13.
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Since then, it has traded for as high as $4,225, according to the CoinDesk Bitcoin Price Index. Standpoint Research’s Ronnie Moas in July predicted that at year’s end, Bitcoin would be trading at $5,000 per coin and right now that prediction no longer seems far-fetched.
A couple of ways the Bitcoin’s surging price can be explained;
- The heavily debated Bitcoin split or hard fork did not affect the currency in any discernable way. The cryptocurrency was split in two, creating a new digital currency called “bitcoin cash.” But while bitcoin’s value has continued to climb, Bitcoin cash has floundered.
- With all the talk of a World War as the U.S and North Korea continue to trade words, Bitcoin is acting as a disaster hedge, much like gold.
- Institutional investors are lining up to get into the cryptocurrency markets. Forbes counted 15 new hedge funds poised to launch this year.
- Dozens of hedge funds are in the pipeline, according to trade newsletter Hedge Fund Alert.
- The cryptocurrency continues to go mainstream. Earlier this week mutual funds giant Fidelity released a feature that allows its customers to view their bitcoin, ethereum, or litecoin holdings from within their Fidelity account. Twitter and Square co-founder Jack Dorsey has also talked up Bitcoin’s potential as the “the next big unlock” this week.
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The co-author of a forthcoming book on valuing Bitcoin and other cryptocurrencies, Chris Burniske, has pointed out that there’s a strong correlation between bitcoin’s price and the performance of the search term “bitcoin” on Google, as calculated by Google Trends. It’s not a perfect indicator: Google Trends sometimes lags and sometimes leads Bitcoin’ price.