Unless you decided to use your huge bitcoin profits to take a vacation on a remote island, you have by no doubt noticed the huge upswing in the bitcoin price this month. In fact, if you’re like us, you probably can’t stop watching the price on your phone either. This seemingly hard-to-believe price growth has many wondering if this is just another bitcoin price bubble or if there is a legitimate reason for the rapid growth in valuation. We believe there are fundamental changes happening behind the scenes that are creating greater demand for bitcoin.
For those who are watching the bitcoin space from the outside, we wanted to give some insight on what we’re seeing as active movers in the space. Here we have provided some of reasons why we believe bitcoin is growing right now.
- China. We’ve all heard rumors that demand for bitcoin is growing in China, and the evidence is visible. Massive interest in bitcoin by users in China was recently sparked by featured stories on state television and quotes from government officials supporting the concept of a non-government reserve currency. This interest has converted into substantial growth in trading volume at BTC China, now the world’s largest bitcoin exchange. The chart below shows how quickly trading volume in China has gone from nearly zero to world-moving levels in just two months.
- Bitcoin Investment Trust and Hedge Funds. Institutional demand for bitcoin is growing, fast. SecondMarket’s Bitcoin Investment Trust, which allows funds and private wealth managers to add bitcoin to their investment portfolios, announced this week that it had reached its year-end growth target in just four weeks. The Bitcoin Investment Trust has purchased over $15 million worth of bitcoin in the last month alone. Other institutional players are investing in the space as well. Private purchases completed by hedge funds and high net worth individuals are now a growing channel of buying demand for bitcoin. In short, institutional money is starting to flow into the space.
- Venture Capital. Venture capital investments continue to move into the bitcoin space, with over $10 million in bitcoin-related investments announced this month. As the infrastructure around bitcoin grows, the currency itself is poised to increase in value as more transactions happen over the network. Increased transaction volume on the network level should generally translate into increased demand at exchanges, which will help support further increases in the bitcoin price. Consequently, any announcement of venture capital investments in the space should be a bullish sign for the market.
- Coinsetter Announcement This Week. Last but not least, we will be making an announcement this week that will give bitcoiners a reason to be bullish on the market. In fact, after a few months of silence, we have a number of important announcements that we will be making over the next two months. It’s going to be a fun ride, so stay tuned!
Okay, we’ll give you one announcement now. Coinsetter has two compliance-approved bank accounts, one of which is in the United States.
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