The last two weeks have witnessed a very interesting and dramatic rise in the price of bitcoins. The reasons for this rise can be briefly explained as follows: the Chinese government, the New York Stock Exchange, the European Central Bank, and the United States government all started to implement policies that would encourage the growth of digital currencies such as bitcoins. These policies resulted in the adoption of the ” bitcoin bubble” in China alone. At the same time, the Chinese government also began to prohibit the trading of mainland currency in virtual environments such as bitcoins.
The Prediction and Bitcoin Prices
To date, there are many people speculating on how the prices of bitcoins will evolve over the coming years. Some investors are pessimistic predicting a downward trend whereas others think that the virtual currency is on its way to achieving its main goal of becoming a global money replacement. Regardless of the view that you have, it is important to understand that the bitcoins price has been highly volatile in the past few months. During this period of time, the prices of bitcoins skyrocketed by more than 50%. This is understandable considering the increase in demand among Chinese investors.
Since then there has been a large spike in the prices of bitcoin. There is an obvious correlation between the two trends. The demand for bitcoins is likely to increase in the coming years and the number of users is also on the rise. This means that the supply will also increase in order to meet the increasing demand.
There is a distinct possibility that the price of bitcoins will decrease again in the near future. This decrease could occur if the Chinese government begins to interfere with the activities of traders or if they start to implement policies that negatively affect the country’s economy. The two factors are hindering both the expansion and the improvement of the ecosystem around the decentralized autonomous system of bitcoins. Therefore the two factors are preventing the downward trend of the bitcoin prices. However, it is still too early to make predictions and to draw any conclusion regarding the upcoming year and the coming months.
Development and Advanced Technologies
A major development that may lead to a correction in the future is the implementation of more advanced technologies in the future. One such advancement is the release of software that will facilitate the transfer of digital assets like bitcoins over the internet. Another potential reason for a correction in the coming years is the increase in the use of other more popular and more secure forms of currencies. An example of this is the adoption of the dollar as the main currency in China. It is clear that the growth of the Chinese digital currency will boost bitcoin prices in the coming years because it is one of the most widely used currencies worldwide.
At the end of July 2021, the value of bitcoins reached an all-time high of about $715. At that point, the value of all other currencies was declining and many people were wondering what was going to happen to the value of the popular decentralized digital asset. Well, the answer is simple. July 2021 was the first time that the value of bitcoins reached that high.
During the summer of 2021, the value of bitcoins went down by about thirty percent. This was the result of a number of problems. First, the value of the U.S. dollar strengthened and the weakness of the Japanese Yen made many traders think that the value of bitcoins had decreased. Second, the weak economy in the United States caused many businesses to expand at a much slower rate and there were not nearly as many unsold dollars as expected. Finally, the troubled economy in Europe also caused many traders to become uncertain about the long-term profitability of trading currencies.
Now, it is evident that we are going to see a correction shortly. Right now the weakness of the euro and the Japanese Yen is helping to keep the euro weak while the strong U.S. dollar is keeping the yen strong. In addition, as the United States begins to settle into its recovery and as more companies begin to accept bitcoins for payment for their products and services we will see a further rise in the bitcoin exchange rate. If you have bought some bitcoins and are holding them as an investment opportunity this is the time to buy, as this could be the beginning of a very nice run!