The reasons behind the new bitcoin hype are the adoption of the cryptocurrency among institutional investors and the instability in the traditional economies.
Market Watch labels bitcoin the best commodity of the year as the result of the December price hike:
“The price of a single coin soared more than 100% this year — putting bitcoin on track for its best annual performance since 2013,” says the article.
Market Watch lists three reasons for the recent price surge. The first is the continuing economic crisis in China. Domestic investors eagerly convert fiat money into bitcoins to save them from unpredictable fluctuations of the local economy.
The article quotes the “interests of the institutional investors” as the second factor behind the bitcoin hype focusing attention on the Bitcoin Investment Trust. At the same time, it ignores the wider adoption of the blockchain technology in 2016 and increasing investments into related projects from mainstream banks and global corporations, the most visible example being R3CEV consortium.
The third reason is the resolution of the block size debate. As CoinFox reported earlier, in December a group of Core coders informed the community that they are developing the next stage of bitcoin scaling solution, which includes the long-awaited 2Mb block size limit. The work has been going on for a year now and may solve one of the problems that threaten the further development of the bitcoin economy.
The article has an open end as the author does not offer any predictions about the trajectory of bitcoin progress in the near future.
MarketWatch operates a financial information website that provides business news, analysis and stock market data. It is a property of News Corp., a subsidiary of Dow Jones & Company, and a part of Dow Jones’ Consumer Media Group. It regularly covers topics related to blockchain and digital currencies.
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