December 5, 2016
Bitcoin transactions are increasing significantly worldwide. The week of 20th November was the busiest ever. Here’s a snapshot of this peak timeframe:
• Two million bitcoin transactions
• Tens of thousands of transactions backlogged for confirmation
• 333,466 transactions processed in a single day
High demand is driving prices up. Way up. The bitcoin price hit a two-year high on 2nd December, reaching $778, the highest price this year. November was a good month, with the price hovering in the $730 – $750 zone. On 1st December, it broke the $750 mark for the sixth time since the last half of November. That’s game-changing, psychologically speaking.
What is driving all of this?
The increase in activity reflects general anxiety about fiat currencies. In China, the yuan reached an eight-year low in November amid economic stagnation. There are signals that demand for bitcoin could climb even higher in January. That’s when regulators press the reset button on the amount of foreign currency people can convert.
India is also having an impact, following Prime Minister Narendra Modi’s demonetization shenanigans last month. Modi’s solution to the country’s corruption and tax evasion problems was to strip all 500 and 1,000 rupee banknotes of their status as legal tender. Just like that, 86% of the country’s cash became worthless overnight, without warning.
One of the many reasons we love bitcoin: It is not subject to the vagaries of government officials.
After this chilling experience, India is rapidly warming up to cryptocurrency. Demand is soaring in the world’s second-most populated country, driving the price to nearly $1000. This is a country where cash is king. Or, at least it was. India’s Finance Minister encouraged the adoption of digital currency at an urgent pace he called “mission mode”.
In Italy, the bitcoin price jumped to $800 in response to the resignation of pro-EU Prime Minister Matteo Renzi. Other geopolitical factors are in play all over the map, notably in Europe, as the future of the EU is on shaky ground.
Also working in bitcoin’s favor are scalability innovations like Segregated Witness, successful Blockchain and Lightning Network tests, and new markets adopting bitcoin as a viable currency option. 2016 has been a banner year, and we expect more upward volatility in 2017.