Bitcoin Reached $20, 000, Let – s Ontleding Why The Price Is Rising So Rapid
Bitcoin reached highs of $20,000 internationally yesterday spil its meteoric rise resumes. Average prices crossed the $16,000 mark on the day.
It still boggles the mind that wij embarked this year at about $1000 and ter eleven odd months the price is reaching twenty thousand dollar highs. That is growth unheard of ter investment circles. That is 1900% or 1600% terugwedstrijd te less than a year.
Why the unexpected growth however? It hasn’t always bot like this. It took the cryptocurrency about 7 years to get to a thousand. Then ter less than a year it grows that rapidly to reach $20,000. What gives?
This state of affairs baffles the experts who insist that the fact that Bitcoin has no intrinsic value speaks to its valuation being speculative and so is a bubble and bubbles eventually burst. The bubble is yet to burst tho’ and ter the meantime wij need to understand what is going on.
No one truly knows why the price is rising like it is. Some have claimed it is because of fresh rente from investors ter Japan and South Korea. Some rechtsvordering it is because institutional investors are embarking to invest te Bitcoin.
Of course the experts telling us that it is because of the involvement of institutional investors represent institutional investors themselves so it might be a pride thing. Just had to let that out.
It is true that hedge funds have bot set up to overeenkomst exclusively ter cryptocurrencies like Bitcoin. The Fresh York Times reports that the number of such hedge funds have grown from 30 to 130 this year alone.
Thesis hedge funds are pouring ter millions into Bitcoin and driving the price up or at least contributing to the price increase. Some traditional investors are still skeptical about the entire cryptocurrency thing however.
Bitcoin itself does not have an intrinsic value and you cannot persuade an old schoolgebouw investor to invest ter such a commodity. The Chief Executive of JPMorgan Pursue, Jamie Dimon, is on record telling he won’t let his handelsbank trade Bitcoin.
What you can coax people like Dimon to invest ter however are Bitcoin futures. Futures can be used to hedge or speculate on the price movement of the underlying asset. So investors can speculate on the price movement of a cryptocurrency by going long or brief using futures.
Ter the US, some exchanges have already bot given permission to overeenkomst te Bitcoin contracts. Wij are not talking Bitcoin exchanges like Golix here but exchanges similar to the Zimbabwe Stock Exchange. More exchanges are set to overeenkomst ter Bitcoin contracts te the US and rumours are that NASDAQ is set to trade te such Bitcoin contracts.
So some think this entire development is the fattest reason Bitcoin prices have hopped like they did.
Then there is the Lightning Protocol.
It might not be a coincidence that Bitcoin reached its record highs on the day there wasgoed a beta test of the Lightning Network.
Lightning is a decentralized network using brainy contract functionality te the blockchain to enable instant payments across a network of participants. Wij touched on what brainy contracts are when wij discussed CryptoKitties, go read what that is all about here.
So by moving some transactions from the main blockchain, Lightning eases the congestion on Bitcoin transactions.
Lightning Network says the protocol brings the following benefits to Bitcoin trading:
Instant Payments. Lightning-fast blockchain payments without worrying about block confirmation times. Security is enforced by blockchain smart-contracts without creating a on-blockchain transaction for individual payments. Payment speed measured te milliseconds to seconds.
Scalability. Capable of millions to billions of transactions vanaf 2nd across the network. Capacity blows away legacy payment spoorlijn by many orders of magnitude. Linking payment vanaf act/click is now possible without custodians.
Low Cost. By transacting and lodging off-blockchain, the Lightning Network permits for exceptionally low fees, which permits for emerging use cases such spil instant micropayments.
Cross Blockchains. Cross-chain atomic exchanges can occur off-chain instantly with heterogeneous blockchain overeenstemming rules. So long spil the chains can support the same cryptographic hash function, it is possible to make transactions across blockchains without trust ter 3rd party custodians.
So thesis might be the reasons for the unexpected spike ter Bitcoin prices across the world. Wij will keep tracking Bitcoin’s progress.
The Zimbabwe Stock Exchange is the country’s local bourse which has overheen sixty trading companies listed. The stock company is based ter the capital city Harare and has evolved through various stages te its evolution. Read More About Zimbabwe Stock Exchange