The rise in the price of coins in 2017 may be determined by these factors

There are many factors that affect the value of the digital currency Bitcoin, so the price of the currency is difficult to predict. However, there are six major events that are likely to bring a new round of price increases in 2017, including the activation of Segregated Verification (Segwit), the launch of the Lightning Network and Tumblebit (anonymous off-chain payment hub), the listing of Bitcoin ETFs, and financial crises and economic instability.

Segregated Witness, Lightning Network, Tumblebit

Segregated Witness, Lightning Network, and Tumblebit are all expansion plans designed to address the problem of increased transaction volume on the Bitcoin network due to a surge in the number of users.

From the current situation, given the support of wallet platforms, startups and miners, segregated verification is likely to be activated. According to Bitnodes, a data platform owned by 21 Inc., 39.6% of full nodes currently support running segregated verification. Recent research by Alex Petrov of Bitfury shows that once segregated verification reaches the activation threshold (95% miner consensus is required), this expansion plan can at least increase the capacity of the Bitcoin network to 2.1MB .

The size of a block generated by Segwit depends on the type of transactions in it. However, as of January 2015, the average size of a block generated by Segwit has reached 1.7MB. As of today, November 2016, the block size is likely to be 2.1MB.

The Lightning Network and Tumblebit’s methods of expanding the Bitcoin network are different from SegWit. The Lightning Network does not directly increase the block capacity, but instead performs instant settlement of micropayments. Currently, due to the limitations of transaction settlement time in the network, micropayments cannot be settled instantly on the chain.

In addition to expanding the network, Tumblebit can also bring greater anonymity to Bitcoin users, ensuring economic freedom and privacy.

The above three scaling and privacy solutions can greatly enhance the value of Bitcoin because they improve the efficiency of the network and adapt to the demand for anonymity.

Bitcoin ETF listing

Bitcoin ETFs are also known as exchange-traded funds. Many experts, entrepreneurs, and investors believe that ETFs are an important product that will push Bitcoin into the mainstream. With ETFs, investors and traders can buy and sell Bitcoin through regulated platforms such as stock markets.

The U.S. Securities and Exchange Commission (SEC) is currently reviewing two Bitcoin ETFs. One of them was initiated by the Winklevoss brothers. After the Bitcoin ETF is listed, multinational audit and financial services giant State Street will be responsible for the "day-to-day management of the trust", maintaining its ledgers and calculating the trust's net asset value (NAV) or the issue price per share.

SolidX ETF development seemed to be making great progress before the SEC delayed its listing again in September. Unlike the Winklevoss twins’ ETF, SolidX is able to provide insurance to its investors. This could attract a large number of traders and companies to make safe Bitcoin investments.

Once these two Bitcoin ETFs are successfully listed, both traditional investment companies and traders in emerging markets will actively participate in investing, thereby pushing Bitcoin into the mainstream.

Financial crisis and economic instability

The global financial crisis and economic instability may also lead to a rise in the price of Bitcoin. If the government and local authorities continue to impose strict capital controls and unrealistic financial regulatory measures, more companies and people will simply turn to other options such as Bitcoin.

Bitcoin will surely attract more and more users due to its high liquidity, especially in countries such as China or Venezuela that implement strict capital outflow controls.