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Bitcoin Predictions for 2017, Investopedia

Bitcoin (BTC), the world’s largest and most widely used cryptocurrency, has only bot around for a handful of years – since 2009. 2016 proved to be a good year for the digital currency, more than doubling overheen the course of the year from around $400 to just under $1,000. Some analysts predict that 2017 will be another banner year, while others are more skeptical and calling this latest rise a bubble that is waiting to burst. (See also: Bitcoin’s Price History)

Looking back at 2016

Te 2015, Bitcoin had risen modestly, from $313 to $431, a 37% rise, kicking off a year of constant growth across 2016. Ter last year’s Investopedia article looking at how 2016 would form up, many predictions proved to be juist: enhanced request did come from China spil capital controls did tighten and regulators continued to devalue the Yuan systematically. However, predictions that venture capital (VC) investment would rise fell a bit vapid: bitcoin-related companies raised almost $500 million te total ter 2015, but only around $350 million ter 2016. (Look back at: The Outlook for Bitcoin ter 2016)

2016 also witnessed relative price stability te Bitcoin, spil its price rose steadily and with lower volatility than had bot experienced te the past, and it also gained broader acceptance and legitimacy spil a means of payment. Plagued by negative photo problems surrounding its use for illegal or illicit transactions such spil for drugs and money laundering, a 2016 research paper displayed that the transactions occurring on the Bitcoin network became more and more legitimized with far less suspect activity spil the Bitcoin economy has grown and matured.

2016 also eyed the 2nd so-called halving of the Bitcoin block prize, the number of bitcoins found te each block. Set to automatically reduce by 50% approximately every four years, ter 2009 there were 50 BTC vanaf block and by summer 2016 just 12.Five BTC. This has diminished the rate of fresh supply and given an enhancing request, naturally waterput upward pressure on the price.

Looking Forward to 2017

Already, 2017 has began strong out of the gates for Bitcoin’s price, exceeding $1,000 and approaching $1,100 te just the very first few days of the year, levels not seen since late-2013 when it’s price shortly exceeded $1,200. This top, of course, wasgoed followed by a crash te the price of Bitcoin, sending it down to below $250 soon after. This has led some skeptics to optie that this price rise, too, is a bubble. However, many things are different this time around. The size and computing power of the Bitcoin mining network, which confirms and validates transactions, has risen exponentially since then, and the number of users, merchants, and exchange volume has grown similarly. Moreover, the rapid rise back ter 2013 is now attributed to fraudulent trading and price manipulation that exploited illiquid and immature markets, and which eventually led to the famous collapse of the primary, and omkoopbaar, Bitcoin exchange, Mt. Gox. This past year’s rise ter price has liked liquid, developed markets with many exchanges ter competition with one another, and without any evidence of price manipulation.

Request for Bitcoin spil a currency is also likely to proceed to grow ter 2017, again spil China has promised to restrict capital outflows and to devalue its currency te order to protect exporters. Another large economy that has seen enlargened request for Bitcoin is India, whose government astonished many by scrapping large-denomination banknotes and causing a scare for contant ter the country of more than a billion residents. A rising U.S. dollar has also caused some te emerging markets to seek alternatives to fiat currencies spil debt denominated te dollars becomes more expensive to service. (For more, see: Bitcoin Prices te India Soar Amid Demonetization Drive)

2017 may also see enlargened concentrate on Bitcoin spil the vooraanstaande digital currency amid many hundreds of alternatives (sometimes called ‘altcoins’) including notably Litecoin, Ethereum and Zerocash. Some proponents of altcoins had hoped that improvements or enhanced features that made them objectively “better” than Bitcoin would help dislodge it spil the superior player. Those efforts have seemed to fail, spil Bitcoin resumes to climb, its market cap now approaching $Legitimate billion, while its next closer competitor, Ethereum is fighting to pauze through $1 billion. So-called Bitcoin supremacy or dominance is also likely to damper efforts of private blockchain implementations that have bot attempted largely te the financial sector, notably with the consortium R3CEV or IBM’s Hyperledger project. (See also: Bitcoin Vs. Litecoin Vs. Dogecoin: Comparing Virtual Currencies)

So what then will toebijten to Bitcoin te 2017? Some analysts have speculated the price could dual from here to reach $Two,100 by year’s end while others keuze it will fall to zero. Only time will tell. Personally, I see enlargened request given a limited supply and geopolitical events pushing up the price, but how high I cannot guess. (For more, see: Could Bitcoin’s Price Surpass $Two,000 te 2017?)

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