Possible Trump Presidency may result in further heavy trading, reports Juniper Research
The Juniper Research reports that since late May 2016, the value of bitcoin has increased dramatically, rising to US$738 on Sunday, 19th June. This represented the currency’s highest value since its collapse in February 2014.
A variety of factors, particularly the continued weakness of Chinese economy and uncertainty over Brexit, has contributed to the rising value of bitcoin. Because the majority of bitcoin trading runs on Chinese exchanges, investors use bitcoin against expectations of a further fall in the value of the yuan.
During the Greek bailout referendum in 2015, bitcoin trade activity spiked. A similar spike in activity (and value) in the weeks leading up to the UK’s referendum on EU membership had also occurred. The value dipped sharply in the hours before the results were announced amid anticipation of a vote to Remain, only to be partially reversed when it became clear that the country had ultimately voted to leave the EU.
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For 2016 as a whole, Juniper Research predicts that transaction value is likely to be at or around 3.5 times than in 2015. Later in 2016, it is possible that speculation around the impact of a possible Trump Presidency may result in further heavy trading, while the ongoing ramifications around Brexit are also likely to act as an additional spur for higher activity levels.
Cryptocurrencies’ value is determined by supply and demand, hence the volatility of bitcoin. The value of the cryptocurrency peaked in late 2013 at approximately US$1,300; it then endured a series of falls so that by February 2015 it was trading at just under US$220. Bitcoin then recovered gradually and between late-December 2015 and May 2016 was largely trading in the US$400-US$450 range.
Bitcoin is considered to be the first mass cryptocurrency and was devised by Satoshi Nakamoto in 2008. The creation and usage of Bitcoin is based around the ‘blockchain’ concept. A blockchain is the public ledger of all currency created and transactions fulfilled.online retailers have increasingly offer Bitcoin and cryptocurrencies as purchasing options to buyers, but not without its own controversial issues.
Online retailers have increasingly offer Bitcoin and cryptocurrencies as purchasing options to buyers, but not without its own controversial issues.
Over the past 5 years, a number of exchanges closed down and their assets seized after their owners were accused of using the sites for illegal activities, including money laundering and the purchase of prohibited substances. Furthermore, the extreme volatility of cryptocurrencies and disagreements as to what precisely they constitute means that they face a struggle to gain wider public acceptance.
Also Read: The banks of the future – How Bitcoin will help shape the future of finance
Due to the cryptocurrencies’ decentralised nature (which means they are not backed or controlled by central banks), transactions are normally done anonymously, leading to tax evasion, money laundering and payment for other illicit activities such as drug smuggling.
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