bitcoin rise in 2019
Cryptocurrency

Bitcoin: these factors that have driven the price of bitcoin up fourfold in six months

The most famous crypto-currency, the king BTC saw its price jump from $3,200 in December 2018 to $13,800 last week. Bitcoin has hit a 15-month high, and the 2018 correction is now far behind. Several elements are catalysts according to us.

The arrival of Bitcoin futures contracts

Many elements, put together, explain this return to grace. “Among the important things in the pipes is the BAKKT platform that has been launched and is pushing the bitcoin up,” says the crypto money specialist. A significant project launched by the IntercontinentalExchange (ICE, owner of the NYSE), this digital asset trading platform – highly anticipated by the community – is expected to launch its first bitcoin futures contracts in July 2019 for a test phase.

Development of the “Lightning network.”

Beyond this “BAKKT effect,” the price of bitcoin has also been driven by the development of the “Lightning Network” (or “flash network”), created to respond to the significant problem encountered by crypto money at the end of 2017, namely the blockchain congestion where transactions are validated and recorded. With Bitcoin initially created to process 7 transactions per second, the explosion in the number of users caused transaction time and costs to skyrocket in 2017. It is where the idea of the Lighting Network came into being. This protocol, which is placed above Bitcoin, should improve its “scalability” (the number of transactions per second) to encourage its potential widespread adoption.

A heaven status?

The deflationary nature of the Bitcoin system has been described by some as a “heaven,” in the same way as gold, for example. Indeed, the source protocol stipulates that the maximum number of bitcoins in circulation will be limited to 21 million units, each divisible up to eight decimal places. The rate of creation of new units (via a so-called “mining” process by which Bitcoin transactions are secure) gradually decreases to zero and, assuming that the protocol will not be modified, the last bitcoin will be “mined.” In practice, “miners” perform mathematical calculations with powerful computers for the network and collect Bitcoins as rewards).

The Libra effect?

If no one knows where Bitcoin will stop, some analysts predict that “the current bubble is not finished and will go up to 6 digits” (100,000 dollars or even more). “Normally, after a bitcoin bubble burst, we see a crash of around 80% of its value, but the recent arrival of institutional investors should be able to limit this loss to about 50%” analysts estimate. “Many people believe that the market cap for bitcoin could reach that of gold,” corroborates other renown investors. The real challenge is to “reach a certain critical mass of users to limit volatility,” particularly high on Bitcoin. The latest example to date, since its ceiling reached Wednesday evening at nearly 13,800 dollars, Bitcoin underwent a new violent correction by dropping more than 23% on Thursday to fall to 10,600 dollars, before rising again on Friday, to 11,950 dollars around 17:30.

One thing is certain, you will hear a lot about bitcoin in the next upcoming years!

Kayden
I have a passion for everything fintech and crypto related. Early Bitcoin invester, this blog is a way to share my passion for this amazing industry and ultra-dynamic space!

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