Bitcoin Price Nears All-Time High in Most Markets at $1,108
Bitcoin price has peaked US$1,108 on February 21, nearing its all-time high average price of $1,140 for the first time since January 4. The overwhelming performance of bitcoin price is attributable to the exponential growth of the Japanese market, increasing demand from Chinese traders and the stable growth of bitcoin in general.
Since the People’s Bank of China released its first statement towards bitcoin exchanges including Huobi and OKCoin, the Japanese bitcoin market has seen the emergence of bitcoin merchants, service providers and major trading platforms.
BitFlyer, which secured a US$27 million Series C funding round led by multi-billion dollar Japanese conglomerate SBI back in April of 2016 secured yet another multi-million dollar investment last week from banks in Japan which recognized the extraordinary growth of BitFlyer.
The expansion of BitFlyer and its surging trading volumes represent the state of the Japanese bitcoin market as of current. More merchants are beginning to accept bitcoin, the government is collaborating with bitcoin companies to introduce practical and realistic policies and Japanese bitcoin exchanges are seeing an increasing rate of adoption primarily due to an alteration in the Japanese people’s viewpoint of bitcoin as a legal tender and payment method.
As covered by CCN.com article entitled “Long-Term Indicators of Bitcoin: Transactions, Hashrate & More,” there exists five major indicators that can be utilized to predict the long-term price trend of bitcoin. By actively investigating into the status of the bitcoin network’s user base, hashrate, volatility, and bitcoin wallets, analysts are easily able to presume the long-term health of bitcoin and its price trend.
Bitcoin’s speedy recovery from $950 to $1,108 can be attributed to the Chinese market’s resilience towards the PBoC and regulators as well as the excessive growth rate of the Japanese bitcoin exchange market, which recently overtook the Chinese and US markets. In fact, the market share of Japan over the bitcoin global exchange market is currently larger than that of the US and China combined.
When the People’s Bank of China’s regulatory pressure forced OKCoin and Huobi to suspend withdrawals for a month, the price of bitcoin quickly declined, as investors in the West began to panic sell. Bitcoin exchanges including Bitfinex demonstrated rapidly declining bitcoin prices and trading margins.
However, almost immediately after the halting of withdrawals, the Chinese market saw an interesting trend; the LocalBitcoins China volume started to explode as investors and traders from the Chinese market’s two largest bitcoin exchanges moved on to over-the-counter and direct peer to peer bitcoin trading methods.
As a result, the weekly trading volume of LocalBitcoins rose from 8 million Chinese yuan to nearly 40 million yuan, increasing roughly by 5 times, recording a $5.8 million weekly trading volume.
The migration of users from Chinese trading platforms to LocalBitcoins and the Japanese exchange market show that the traders aren’t necessarily concerned about the PBoC’s involvement with the Chinese bitcoin market. Traders have also begun to understand that regulated bitcoin exchanges are essentially centralized infrastructures laid upon a decentralized architecture and risks emerge when using government-regulated systems.
By this trend, the price of bitcoin should continue to increase. Currently, traders and investors are awaiting bitcoin to reach its all-time high price of $1,140 in upcoming weeks.
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