It has certainly been a hectic year for Bitcoin so far. After seeing a disastrous start to the year, following great success at the end of last year, it started to peak once again, although not to the same extent as the latter stages of last year. It has risen nearly 50% in the past month alone, hovering just under $10,000. Experts are now forecasting that Bitcoin could burst through this $10,000 barrier and be worth over $15,000 by the end of 2018.
The industry as a whole has seen a number of new developments over the year so far. A lot of these, have unfortunately, had a negative effect on the market, and seen values fall across the board. An example of this is the restrictions that have been put in place by banks, stopping the use of credit cards to purchase cryptocurrencies. Another notable factor was the launch of Bitcoin futures, which sent the value plummeting. This is because they have allowed investors who have a negative outlook on Bitcoin to enter the market, which they had previously been unable to do.
Putting all this aside though, the prices have started to recover over the last couple of months, and this is thanks to some more positive developments that have taken place more recently. Goldman Sachs, have set up a cryptocurrency trading desk, which helped alleviate some of the more negative attitudes to the market, and instead marks the first step towards integrating cryptocurrencies into the traditional financial industry. On top of this, cryptocurrency exchanges have to be registered with financial regulators. The hope behind this is to eventually make the industry much more stable and sustainable and has had a positive effect in boosting the confidence of investors.
The trading desk is close to being up and running, and the bank is expected to begin offering clients derivatives linked to cryptocurrencies. They are expected to buy and sell Bitcoins on behalf of their clients after receiving the appropriate approval. They also hope to get other investment banks interested in cryptocurrencies over the rest of the year. On top of this news, another positive factor is that Intercontinental Exchange is working on a new trading platform that will allow institutional investors to buy and hold cryptocurrencies.
So, just how are these positive developments helping Bitcoin’s price? It works on a demand and supply system. The demand is driven by how many active users there are, and how much they transact. The supply of Bitcoin is finite, and 80% of this number has already been mined. Both of these factors are expected to rise over the rest of the year, thanks to the positive movements that w have already discussed and the fact that in theory, Bitcoin and other cryptocurrencies would be accepted into mainstream financial institutions. It is for these reasons that experts are predicting that Bitcoin will hit highs of $15,000 before the year is out.
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