Despite its problems with scalability, which has led some to now complain of fees in the $13 range or $26, bitcoin’s price continues to increase, rising above $2,500 today after what appears to have been a a downwards correction from an all-time high of $2,800.
Its rise is probably mainly due to speculation, in particular by the Japanese where bitcoin trading has been added to z.com, which claims to be one of the world’s largest foreign exchange platform, in a move made after Japan declared bitcoin to be legal tender.
That declaration was made soon after China cut-off bitcoin exchanges in its own country, giving the market to its neighbours, Japan and South Korea, which have gladely taken the opportunity to participate in a booming industry.
Perhpas China finally saw just what, potentially strategic, debacle it had created, so the exchanges opened withdrawals on the 1st of June, just as ethereum trading was to begin. In the process, likely contributing to bitcoin’s recent price rise.
Another reason might be other digital currencies which act as a source of demand for bitcoin because most of them can only be bought with btc. According to coinmarketcap, bitcoin’s highest trading volume is with a currency no one has heard of, DigiBytes.
They appear to be a bitcoin copycat from 2014 which has shot up some 40%, seemingly because they activated segwit, even though they say their blockchain doubles in maxblocksize every two years, apparently in a similar fashion to Bitcoin XT and BIP101.
The only way to buy them is through bitcoin, which might provide the currency with some upwards pressure, with ethereum continuing to be in the top three for bitcoin’s trading volumes even though that digital currency now has its own direct fiat markets.
It appears, therefore, bitcoin largely benefits from other digital currencies, while they, in turn, benefit from bitcoin, until the infrastructure adapts towards trading against other currencies, such as eth. A likely eventuality if bitcoin’s fees keep going up.
Featured image from Shutterstock.
Last modified: June 11, 2020 10:07 AM UTC