Bitcoin price keeps rising towards 7000! Who is the real reason for the surge?

Bitcoin is a globally used virtual currency that is not issued by a specific monetary institution. It is generated through a large number of calculations using a specific algorithm. The Bitcoin economy uses a distributed database composed of numerous nodes in the entire P2P network to confirm and record all transactions.

Bitcoin has been developed for eight years. As the public's understanding of this digital asset deepens, its advantages such as decentralization, global circulation, and security are gradually becoming apparent. Recently, Bitcoin has attracted more and more attention. On the morning of December 28, the price of Bitcoin rose again, reaching a new high, close to the historical high in 2013. In fact, starting from the lowest price of 2351 points at the beginning of the year, Bitcoin has risen by 180% throughout the year, surpassing other assets in the world.

CivicKey CEO Lingham previously said that China may not be the reason for the surge in Bitcoin prices, the real reason is due to the " vacuum in the gap in the Bitcoin supply curve ."

Gil Luria, head of research at Wedbush Securities, said that the advantage of Bitcoin is that its price is independent of other assets, such as real estate, stocks and fixed assets. He said that gold also had this advantage of price independence, but now Bitcoin prices are more volatile. Bitcoin is not a complete safe-haven asset, but having something in your portfolio that is independent of other assets is a huge advantage.

Rumors of China restricting gold imports and India's demonetization and gold confiscation have pushed up the price of Bitcoin to a certain extent. Currently, the global use of Bitcoin is increasing, while the retail profit of precious metals is on a downward trend.

Bitcoin as an asset itself fluctuates dramatically, but it has a low correlation with other markets, so when the value of other assets falls, the investment value of Bitcoin becomes apparent.

In addition, the rise of Bitcoin may be due to the recognition of its underlying technology, blockchain, by global financial institutions. Blockchain technology is a decentralized database that stores assets and transaction information on a peer-to-peer network. It is basically a public registry that records who owns what and what has been traded. These transactions are secured by cryptography, and over time, these transaction histories are packaged into data blocks, which are linked together by cryptographic principles to ensure their security. These transaction records cannot be tampered with or forged, and are distributed and stored in this network. Every computer in this network has a backup of this historical record.

At present, the blockchain market has attracted a lot of attention and investment from all walks of life. A few months ago, IBM Business Value Research Institute released some data to prove the popularity of this industry:

70% of early adopters of blockchain technology are researching how to use blockchain to create new business models and acquire more customers;

65% of banking institutions hope to apply blockchain to their products in the next three years;

80% of banks believe that trade finance, corporate lending and reference data are areas that are likely to be disrupted by blockchain technology;

15% of banks will implement commercial blockchain solutions in 2017;

The companies believe that 83% of reference data, 80% of retail payments and 79% of consumer lending will be impacted by blockchain.

In addition, the blockchain industry will grow from $210 million in 2016 to $2.3 billion in 2021, with a compound annual growth rate of 61.5% during the forecast period. Therefore, blockchain is currently only in the early stages of development, but looking to the future we can see its potential and the economic value that can be achieved in the medium term.

The wind starts from the tip of the green weeds. The rise and craze of Bitcoin are unexpected, but it is worth noting that the price of Bitcoin fluctuates greatly and the increase is not stable, which means that the risk is relatively high. Investors should not blindly chase high prices and pay attention to stop profits in time. (Comprehensive network report)