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BitPay COO Sonny Singh talks about the main reasons for the summer heat in the Bitcoin market.
The Bitcoin price has been one of the hottest topics in the entire investment world this month, whether within mainstream circles or within the Bitcoin ecosystem.
Bitcoin started the month trading at under $530 USD, and within two weeks surged to as much as $780 USD, before leveling out at their current levels, about $200 USD ahead of May’s price.
As we head to the halfway point of probably the most important year in the digital currency’s history, BitPay CCO Sonny Singh discussed the main reasons for the heat in the Bitcoin market before the days of summer.
Regardless of one’s previous investment portfolio, anything that grows over 40% in a couple of weeks is going to draw even a mainstream crowd. Bitcoin is entering its halving event in less than three weeks, so now is the time to expect great volatility.
Singh has submitted the following analysis in regards to the global Bitcoin markets as of late. Not surprisingly, it all starts in Bitcoin’s largest mining and exchange market. “China,” says Singh to Bloomberg West.
“There’s been a lot of activity having China’s (Yuan) price run up about a month ago, and the Yuan was starting to be devalued, and capital controls were starting to go into effect. The people were using (Bitcoin) as a way to get some money into a currency that is not being depreciated.”
Singh also made sure to note that Bitcoin was up over 35% in 2015. In comparison, the U.S. Dollar rose less than 10% last year.
Next up is the Brexit vote this week. As seen last summer during the “Grexit” fiasco, Singh suggests Bitcoin could be seen as an international investment ‘safe haven’ in this time of national and regional economic uncertainty, on par with precious metals like gold and silver, and the facts back up his claim. Since June 1st, silver is up about 10% and gold is not far behind. Other countries like Brazil and Venezuela, with faltering economies, are also increasing Bitcoin usage year by year, buoying trading value.
The easy answer is the Bitcoin halving, currently scheduled for July 10th. Singh confirmed with Chinese exchanges that the halving is fuelling speculators in China to move in on Bitcoin this month, hoping the value increases later this year.
Oddly, Bloomberg host Cory Johnson called the buying strategy “stupid,” comparing the Bitcoin halving to the value of one large potato chip having more value than two small potato chips.
Singh says that the fourth reason, which he thinks is the most exciting, is that the Bitcoin adoption is growing globally.
“Two years ago, when the price was over $1000 USD, the number of Bitcoin transactions per day were only 50,000 (now, the number has grown to 5X that amount, daily) (and) 70% of our (BitPay) Bitcoin transactions were happening domestically in the United States, and today that has completely reversed! Now, 70% happen internationally and 30% domestically.”
To further that point, since the close of Mt. Gox, major companies like Microsoft, Expedia and the gaming platform Steam, recently added by BitPay, have adopted Bitcoin, increasing its global appeal.
Bitcoin works well in major markets, like India, which may not have credit cards made for online gaming, so Bitcoin can be a preferred international payment avenue.
The coming weeks in Bitcoin may be very volatile and CoinTelegraph will keep you up to date on the market changes, so bookmark us for the latest Bitcoin price news.
Images provided by Goldprice.org
- by Evander Smart
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