Bitcoin bounces back. The anonymous digital currency that is now globally accepted but had also attracted various interest groups from legit businessmen to drug dealers and tax evaders, is on a resurgence.
Bitcoin Bounces Back Despite Bad Press
Bitcoin bounces back in the face of negative publicity. The anonymous digital currency that is now globally accepted but had also attracted various interest groups from legit businessmen to drug dealers and tax evaders, is on a resurgence according to a Financial Times report.
After a renewed price jump that reminds of its first speculative bubble three years back, many bitcoin backers warn that a similar sharp correction is likely to follow.
Initial Bitcoin Boom
Bitcoin first boomed in 2013 as speculators and libertarian idealists and assorted lawbreakers were attracted to the idea of a currency designed to be beyond the reach of central banks and national regulators.
Tech entrepreneurs and venture capitalists also hopped on the ride, speculating that it would be a platform for a disruptive new financial services industry.
The bitcoin’s price later dropped by more than 80 per cent from its high, after a cyber-heist from its biggest exchange and growing attention from regulators.
After that, many in the financial world have dismissed it as a failed experiment in digital finance but the idea behind a core part of its technology — the blockchain, a distributed ledger that simplifies transaction processing — has since transitioned into mainstream finance.
Bitcoin bounces back again
After bitcoin bounces back by a 31 per cent jump since the start of December 2016, its value has more than doubled this year, raising the value of the outstanding currency to $16bn.
Prices being quoted on bitcoin’s unregulated exchanges, even though is 14 per cent below the peak, are higher than at any time besides a handful of days during the 2013 boom.
The bitcoin digital currency was at about $975 on Friday.
The fact that it has revived in spite the wave of bad press has fed hopes that it will fulfill the ideals of a digital currency beyond the influence of national governments it once aroused. “Bitcoin is incredibly resilient,” Adam White, head of GDAX – an exchange run by the US digital currency company Coinbase, said.
A viable alternative currency
Tim Draper, a venture capitalist and early backer of bitcoin, claimed the recovery showed bitcoin was becoming “a viable alternative when people’s confidence in their own government’s currency waivers.
The world will be a freer, wealthier, and smoother operating place as we apply more and more uses to bitcoin and the blockchain”, he stated.
Critics still warn that the bitcoin resurgence shows all the characteristics of a new speculative bubble. The wild volatility of bitcoin and idealistic hopes of supporters, make it like an overhyped tech stock than a practical currency.
Bitcoin prices are mainly set in China, where over 90 per cent of the world’s trading occurs. Even backers say it is hard to understand the dynamics behind the currency.