Bitcoin Price Prediction 2017
Any decent investor has to stay on top of the latest market news and monitor the performance of different instruments. The price of Bitcoin is an aspect that traders must look at before making gambles. With the start of a new year, it is imperative to get forecasts for Bitcoin prices. Bitcoin is a highly volatile commodity, but the past year has seen its price maintain an above average performance.
In fact, 2016 saw Bitcoin value at some of its highest prices as it rose from an estimate of $430 during the first months to $963.14 on December 28, which is an increase of over 100%. Expectations are that the prices will hold on strong at the beginning of 2017 and may proceed to reach highs of between $2,000 and $5,000. Several factors come into play when looking at the rate of Bitcoin, and learning about how these triggers work is essential before you can start working with an online broker.
Demand
Before Bitcoin got to where it is today, it wasn’t worth anything because the demand for the currency was low. This aspect affects Bitcoin’s worth just like any other commodity in that if more people have a use for it, the higher its value. The more shoppers continue to use Bitcoin for their transactions, the more it gains in value, although it doesn’t have a direct impact on price. Over the years, major companies such as New Network, Dell and Egg have allowed customers to pay for purchases with Bitcoin, and that has boosted its credibility. As this trend continues in 2017, the use of Bitcoin will propel rates even further.
Supply
The production of Bitcoin is structured to be 21 million, and at present, over half of those are in circulation. An increased supply of Bitcoin in the market will effectively collapse the prices. A few individuals have a significant amount of Bitcoin, and these are the ones who got in the game before the virtual currency gained popularity. Now if any of these major holders dump their stock, an influx of supply will result, leading to a decrease in value; and consequently, price.
Government Regulation
Concerns about whether governments will institute regulations for Bitcoin transactions have been influencing the markets ever since people started using the virtual currency. Many states have reservations about the lack of transparency that comes with using virtual currency. The raging debate is that criminal elements and terrorists can use these unconventional transactions to hide their true intentions. Proponents of government regulations argue that if laws made Bitcoin legal, then it will be possible to measure its usability and durability. Conversely, some people feel that laws will give nations the power to control Bitcoin mining, and that can present some challenges. This affects the market in that those for regulations will buy more of it and those against may choose to get rid of their stock, so it will depend on which side the debate leans
Technology Breakthroughs
Another factor that will enhance the value of Bitcoin is the availability of new technology. Bitcoin security is fundamental, and most investors consider it before getting into the market, meaning that; as it continues to evolve, people will have more confidence. A majority of individuals are turning to wallets because they realise that using exchanges is not very secure. As new trends emerge and people are able to protect their investments better, the use of Bitcoin will go up. Increased modularisation and layering of Bitcoin network architectures is another tech trend that will influence its worth. Blockchain networks are bound to see a few improvements that will enhance the credibility of Bitcoin.
Currency Wars
The manipulation of different world currencies by respective governments is another reason Bitcoin will continue to gain a strong stand in the markets. Examples include the measures that China is taking to devalue the Yuan, and it is not the only state guilty of such actions. Chinese investors have turned to Bitcoin as a way of protecting their wealth. The lack of central controls on Bitcoin makes it a legitimate investment alternative for individuals looking to diversify their portfolios. As the wars against cryptocurrencies, cash and gold continue across the globe; Bitcoin will enjoy an increased importance and dominance, which will only serve to hike its price.