At the beginning of April, reports showed that the value of the Bitcoin rose to over $1 billion, despite suffering a significant drop in value due to the huge debate around the world about the future of its technology – the Blockchain. However, with Japan recently accepting Bitcoin as a form of legal currency with a new law, and a number of big retailers accepting the crypto currency, the Bitcoin has shot straight back up – and has continued to rise throughout the month. Nevertheless, Bitcoin has received a lot of opposition from other countries, like Russia, who are seeking to strictly regulate the cryptocurrency in a bid to tackle all forms of money laundering. Experts in the Bitcoin believe that the move towards a more regulated currency however, could lead to far more investment from those who had previously shied away due to the risks of price swings and volatility. Regulation could settle the Bitcoin market even more, meaning it is highly likely to begin to rise in value even more.
Japan Virtual Currency Act
Japan have been working long and hard to amend its Banking Act, in order to keep up with the growing Bitcoin economy that has developed in the country. A number of amendments were made at the end of March which included an ordinance which concerned digital currencies and their exchanges, showing the country has officially recognised Bitcoin. Simply, it includes an acceptance of the Bitcoin and recognises it as a payment method. Because it is not a legally-recognised currency, it can be treated as an asset and therefore is not subject to the same taxes that other methods of payment are. While the digital currency exchanges will now need to comply with a number of regulatory requirements, such as holding a minimum liquid capital, and put in place leakage, loss and damage of personal fund restrictions, this is an interesting move for the cryptocurrency. The Japanese Bitcoin market is changing rapidly and this is heading far more into a positive direction, which is one of the most fundamental reasons why the cryptocurrency’s value is rising so significantly.
At the beginning of May, Bitcoin’s price surged to an all-time high, reaching $1,400, which is equivalent to more than a 200 percent increase from what the price was at the same time last year. There are a number of reasons behind this which may have influenced the rise in price. The legitimacy and acceptance of the currency in Japan is said to be one the main factors behind its huge increase, with people understanding and facilitating the currency more and more each month. In addition to this, there is a growing demand of people looking to invest in the cryptocurrency, with Bitcoin start-ups attracting a huge number of investments in start-up Bitcoin companies.
Clamp Downs In China
While there are a number of countries that are beginning to accept the Bitcoin, countries such as China are looking to ban or strictly regulate the currency. China’s clampdown on the currency and any exchanges however, could also be an indication of the positive move for the industry. Authorities in China have increased scrutiny in a similar way to Russia and in some cases they have begun forcing them to charge fees. As stated above, increased regulations is a great way to help steady the market and generate even more investments helping to boost the cryptocurrency’s value even more over the coming months. This could lead to a rise in more markets, aside from the already popular Bitcoin casinos, choosing to use Bitcoin in a more diverse way.
Introduction Of LiteCoin & SegWit
One of the biggest influences to the rise in value of the crypto currency Bitcoin, is the introduction of another electronic online currency – Litecoin, as it appears to be encouraging investors to make a move into the market. The development team being Bitcoin Core also introduced a malleability fix back in April known as Segregated Witness (SegWit), and after initial approval, this activation was implemented on Litecoin too. With a poll on the 8th of May suggesting that 83% of respondents support SegWit, it is easy to see why the value of the cryptocurrency is increasing. The surge in price of Bitcoin seemed to coincide with the Litecoin SegWit activation, and while some mining pools declined in order to support the upgrade, its activation and adoption is said to be a hugely important factor in the increase in value of the Bitcoin.
Winvlevoss Twin Proposal
In the US however, things aren’t looking quite as smooth as they are in Asia. Cameron and Tyler Winklevoss, famous twins in the Bitcoin world, proposed an exchange-traded fund based on the Bitcoin to the US Securities and Exchange Commission. The Commission however, rejected the proposal, due to a disagreement about the future of the Bitcoin, and the security and issues of theft and fraud that have been surrounding it.
While there are a number of other policy makers around the world, like the Bank Of England, who are already discussing the possibility of all currency becoming digital in the near future, countries with strict regulations in particular on things like online gambling appear to be the ones who are rejecting the Bitcoin more – although the proposed digital currency frameworks from Japan may help keep governments around the world protected. Rejection and regulations seem to be one of the things that is helping to attract investments, and it is this that is helping to boost the value of the Bitcoin.
While the idea of the Bitcoin is to remain decentralised, regulation is vital in order to protect consumers from things like money laundering. With the rise in regulations around the world leading to an acceptance of the Bitcoin as a regulated currency, there is a chance that Bitcoin’s value will continue to rise as the months go on.