Heavy demand in China has propelled bitcoin's price to $643 and the total value of all bitcoins in circulation to $10 Bn, which is higher than Twitter Inc’s market capitalization ($9.5 Bn).
Its China Again
Heavy selling of the Chinese Yuan in exchange for Bitcoin has been the prime driver of the rapid increase in Bitcoin's price.
The price of Bitcoin in Chinese exchanges like OKCoin and Huobi is CH¥ 4,385 (~$668) which is a significant premium to the the price in global exchanges like Bitfinex and Poloniex.
Restrictions on capital outflows imposed by the Chinese government have resulted in the Chinese buying gold and bitcoins, driving up its price.
Market Capitalization vs. Money Supply
While $10 Bn is nothing to scoff at, it is important to keep the focus on the bigger picture. The most valuable listed company in the world, Apple, is valued at ~$540 Bn.
The current value of Bitcoin is just a fraction (~2%) of the value of Apple. If we compare Bitcoin's value to the value of other currencies in circulation, the difference is even starker.
Total money supply (M0 – value of all coins and notes in circulation) of the United States is around $3.8 Tn. This is 380 times the value of Bitcoin.
Bitcoin vs Gold
According to the World Gold Council, the total amount of gold which has been mined and is above the ground is estimated to be around 187KT.
At current prices, this translates into total value of $7 Tn. While Bitcoin is often referred to as digital gold, its value is less than 0.2% of the value of total above-ground gold reserves.
Huge Upside Potential, Even Now
Bitcoin's value has appreciated significantly in the last one year, almost tripling from the price of $230 in June 2015.
So, is there further upside potential to this bull run? While it is difficult to say when the current bull run will plateau/reverse, the long-term potential of Bitcoin remains huge.
If Bitcoin begins to play even a small role in international trade or if any nation includes Bitcoin in its forex reserves, the price of Bitcoin can skyrocket.