Analysts said the five major reasons for bitcoin is not a bubble

Analysts said the five major reasons for bitcoin is not a bubble


According to foreign media reports, bitcoin digital currency since the beginning of the year rose more than 500%, recently broke the $6300 mark. It can be expected that many financial market experts believe that this is a product of the asset bubble rose sharply.

Frankly speaking, bitcoin and similar digital currency products obtained in the space encryption assets return, since the last century since the end of 90s the Internet bubble era has never appeared. However, bitcoin and early Internet stocks have very different fundamentals, growth trajectories were also more optimistic.

Mainly reflected in the following five aspects:

1. more and more people accept bitcoin as a legitimate currency

One of the largest bitcoin challenge is not accepted by legislators and regulators of financial institutions because of its decentralized characteristics, and it was unfortunately often associated with network crime. However, bitcoin is being more and more accepted by the “official”.

In April 2017, Japan announced that it will begin to accept bitcoin as a legal means of payment, the statement immediately raise the price of bitcoin, and led to a number of bitcoin businesses across Japan increased significantly.

In Philippines, people are increasingly using bitcoin to send and receive low-cost remittance. This point has not gone unnoticed by the country’s central bank. Philippines’s central bank announced in February 2017, will be the bitcoin regulation, which can be used as formally incorporated into the remittance system. Bitcoin in Philippines was given full legal status.

Australia and Russia and other countries have also issued a similar statement, may promote the bitcoin exchange media completely accepted in the world. Taking into account the bitcoin investment and the growing demand of the online payment system, this trend is likely to continue.

2. more and more businesses use bitcoin

In the early stage of bitcoin, its use in the business is mainly limited to some bold e-commerce shops, these shops usually from early bitcoin enthusiasts business. However, with the advanced technology companies and e-commerce platform to accept bitcoin as payment, great changes have taken place in this situation. Microsoft (Microsoft), Le Tian (Rakuten) and Overstock are many large companies to accept bitcoin payments in three.

With the sharp rise in the price of bitcoin, increased media coverage, and Japan to accept the new, bitcoin in the business use rate is rising, this trend is likely to continue.

Online bitcoin reason actually very full. Than the cost of credit card payment to low refund fraud does not exist, a new consumer base, control technology can be attracted.

In the global scope, businesses bitcoin using more digital currency demand is more stable. In view of the current bitcoin business utilization rate is still low, so there is a great space for development.

3. bitcoin is underdeveloped economy plays more and more roles for the reserves of wealth

Another main reason bitcoin may not be the bubble is that it has a very practical application in the economic world to troubled countries. For example, in Venezuela, Bolivia and Zimbabwe and other places, bitcoin has served as a wealth reserve. At the same time, because of the local currency devaluation and become not worth a hair. This can be done by bitcoin transactions with the increase of the local currency and the troubled region’s economic growth has been negatively correlated to prove.

Bitcoin can also help individuals and businesses in the country has strict capital controls, such as Venezuela, receive much-needed remittances, to keep the economy running. In other words, as long as the existence of economic difficulties, the demand will increase the use of bitcoin, bitcoin rate will also increase.

4. bitcoin has just become the mainstream

You can say that 2017 is bitcoin will eventually become the mainstream of the year. Five years ago, if you want to let ordinary people on the street know what is bitcoin, they will probably give you a puzzled look. Today, most people at least heard of bitcoin, many people even know a bitcoin is worth more than an ounce of gold.

Now bitcoin has become mainstream, new investors purchase potential is enormous, especially institutional investors have begun to invest in bitcoin and other digital currency.

5. bitcoin supply is limited

Finally, bitcoin has become another key reason so valuable is that although the demand for it is growing, but his supply is very limited.

Because of the particularity of bitcoin creation, only 2 billion 121 million coins can be mined. In addition, with the passage of time, the creation of new coins slowed, which means that the increase of bitcoin demand, not only with the total supply of currency limited bits, but also accompanied by slowing production and supply.

A bitcoin bubble discussion may continue indefinitely, but because of the fundamental difference between asset classes, between bitcoin and early Internet stocks comparison is meaningless.

As a digital currency media CoinTelegraph pointed out, and the same to the traditional financial circle of criticism, if bitcoin prices rose too fast, will inevitably collapse. The new faith bitcoin and it obviously as medium of exchange maturity has all kinds of bad news because of its strong adaptability to change.

The mainstream forecasters now expect bitcoin prices will rise further, the social networking site TradingView bitcoin traders forecast will hit a record high of $6800 in November.

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