What’s the Reason Behind Cryptocurrency Growth?
In April, the price of the first cryptocurrency started ascending to new pricing levels, breaking its resistance level at $1295. In the past few months, Bitcoin attained a brand new value of $3,000, twice as high as the first cryptocurrency price.
Besides the growing popularity of cryptocurrencies among different countries, the main and fundamental driver of the recent growth is Asia, more specifically Japan and South Korea. In April 2017, Japan authorised all operations involving crypto-currencies, while South Korea issued a new law about decreasing the capital requirements for companies receiving the cryptocurrency, bitcoin.
In addition to the current events that are skyrocketing the demand for bitcoin, a number of other global activities emerged and formed a perfect storm for cryptocurrency investors.
These are just some of the few reasons why cryptocurrency managed to hold such significant growth:
– Applications were registered at the state level in Australia, India, Mexico, Hong Kong on the legalization of Bitcoin,
– Bitcoin could become the official method of calculation for Antigua and Barbuda,
– Several US states (Vermont, Arizona, etc.) began considering at the state level a bill on managing bitcoin,
– The US government allocated $ 2.25 million for the development of blockchain applications, and
– The government of France agreed to conduct a blockchain study to assess the effectiveness of its application in the public sector.
May 23rd marked the Consensus 2017 summit in New York, which resulted in an agreement for updating open source projects that increased network bandwidth, using the original pre-plan SegWit-2MB.
The agreement was signed by 56 companies from 21 countries, including the largest pool mining groups representing more than 83% of the processing capacity of the total network. The announcement of this agreement caused a significant spike in the prices of altcoins.
The effects of the Japanese and South Korean markets still play the largest part in cryptocurrency growth and their exchanges still hold the highest prices for Bitcoin. At present, almost 4,500 Japanese stores accept Bitcoin. Now, stores using AirRegi (a point-of-sales device) will also begin to accept the cryptocurrency. According to forecasts, that will increase the number of stores accepting the Bitcoin to soar to over 260,000 stores by the end of this summer.
Japan, South Korea, and China make more than 30% of global cryptocurrency demand due to significant differences between the popular exchanges in European and American regions. The Asian region prices continue to catch up with other fiat currencies in the region, and they’re currently fixed at a new high of $3,050. Though there are huge gains being made in the European and American markets, these still lack behind the soaring rates in Asia.