High above $7,000: why is Bitcoin rising so high?

High above $7,000: why is Bitcoin rising so high?

Bitcoin’s surged past $7,400 to hit a new record high today after smashing through record after record over the past year. But why exactly is Bitcoin on the rise?

The crypto-currency Bitcoin reached a new high on Friday (November 3) when it hit a high of $7,454.04 (£5693.58) according to CoinDesk.

Jordan Hiscott, chief trader at social trading platform Ayondo markets, believes that bitcoin’s rapid growth model is a sign of shifting paradigms in the world of finance.

He told: “We are in an age where technology is changing the dynamic of the business world.

“Older, traditional organizations are seeing their long-held dominance challenged by ‘disrupter’ companies. “For me, it’s no surprise that another disrupter, this time in the form of an asset or currency, is picking up speed.”

If bitcoin’s upward trajectory in the markets continues, traders could expect to see even more record prices in coming weeks. One factor that could explain bitcoin’s growth in popularity is the lack of external regulation and control from big banks.

Mr Hiscott said: “Bitcoin, with its decentralized exchange, means that all transfers and transactions are peer to peer. “Importantly, no bank or government is involved in these transactions.

“This will resonate hugely with those affected by the printing of money by governments after the 2008 credit crisis. “In addition, Bitcoin is extremely secure, using dual-sided cryptography for each transaction, and there is also only a finite amount ever in existence.”

With these “virtues” in mind, Mr Hiscott is not surprised that the price of bitcoin swelled by more than 500% this year alone. He said: “Not only that, but every week new avenues for trading and speculation come online, providing a wider audience with even more ways to trade the asset, helping to boost its success.”

Iqbal Gandham, UK Managing Director at eToro, thinks that bitcoin’s rise will eventually correct itself. He told: “We don’t think there is a market bubble. There will likely be a correction, as there is every time we see a sharp rise, but viewed through the lens of the last two to three years, Bitcoin has risen steadily.

“This latest rally has been in part driven by CME’s decision to launch Bitcoin futures later this year, which is anticipated to bring more investors to the asset, and is the latest sign that Bitcoin is moving into the mainstream.

“Additionally, we think that the prospect of the upcoming November fork in Bitcoin’s block-chain is also driving investors towards the currency.” But not everyone is convinced about the long-term viability of the token, and some experts are looking for the tell-tale signs of an inflated bubble about to burst.

Kenneth Rogoff, professor of economics at Harvard University, has said that Wall Street could move to create its own digital currencies in a bid to tip the balance in its favor. “It is hard to see what would stop central banks from creating their own digital currencies and using regulation to tilt the playing field until they win,” he wrote in The Guardian.

“The long history of currency tells us that what the private sector innovates, the state eventually regulates and appropriates.  “I have no idea where bitcoin’s price will go over the next couple years, but there is no reason to expect virtual currency to avoid a similar fate.”


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