Recent behavior of Bitcoin reveals that developmental events around certain nations make huge impacts on the cryptocurrency. The most significant among these nations are China, India and most recently, Japan.
With the mainstream adoption of Bitcoin in Japan and the subsequent acceptance of the cryptocurrency by several stores across the Asian country, Bitcoin has responded by its most recent surge in price, rising significantly above the $1,200 mark in the process.
Strength in numbers
Whether positive or negative, news and events out of the aforementioned Asian giants are always well respected by Bitcoin as an entity and the community as a whole.
Michael Vogel, CEO of Netcoins, says:
“China and India represent a significant portion of the world's population and each has a rapidly growing middle and wealthy classes. Both of these countries are also experiencing turmoil with government imposed capital controls, so the importance of Bitcoin is much more apparent to its citizens as opposed to North America, for example.”
One of the major issues that have come up repeatedly within these Asian climes is the attempt of the government to regulate Bitcoin.
Earlier in 2017, there were a few significant events and pronouncements by both the Chinese and Indian government concerning the use of Bitcoin and other cryptocurrencies.
The majority of Bitcoin users have seen these government interventions as events that could negatively affect the growth and development of Bitcoin. On the contrary, these efforts by governments to control the use of Bitcoin may be having a rather positive effect on the cryptocurrency.
Governments are indirectly working for Bitcoin
Simon Dixon, CEO of BnkToTheFuture.com, believes that governments are driving demand in Bitcoin whether they know it or not. He continues by exemplifying the developments in India, where the government's war on cash was an attempt to force bank adoption in India.
Dixon notes that India has less trust for banks than many other nations so some are experimenting with Bitcoin instead.
In addition to this, Japan has chosen to regulate Bitcoin exchanges which means traditional financial institutions are now able to offer Bitcoin to their clients bringing in more demand.
China has decided to implant tougher regulations on Chinese exchanges driving a huge spike in the peer to peer Bitcoin market in China and eventually more trust in the exchanges when they allow withdrawals again.
“What is clear is that no matter what the government does, it is driving more and more demand for the two Bitcoin markets - regulated Bitcoins through exchanges and unregulated peer to peer Bitcoin. All these approaches show the rest of the world that government action drives Bitcoin demand in many unintended ways.”
Japan is a pacesetter
Another important factor identified by Vogel which may be responsible for the Asian dominance in Bitcoin is the fact that Asian countries, Japan, in particular, have always been ahead of the curve with mainstream adoption of new technology.
Cell phones, mobile gaming and mobile payments all gained popularity in Asia years before Europe and the US. It seems that Bitcoin is following a similar trajectory.