Bitcoin soared over $450 for its first time this year according to the Coin Desk Bitcoin Price Index today. This movement represents an eighty-eight percent increase since October 4.
What is causing the demand for bitcoin? Chinese trading has been cited as one possible reason for the increase in demand for the cryptocurrency. Barry Silbert, founder and CEO of Digital Currency Group, has tracked Bitcoin trading at a five to eight percent premium in Chinese trades. The use of Bitcoin to transfer money out of China has become a steady steam since the government has strict exit rules for the yuan.
The driver beneath Bitcoin is the underlying blockchain technology which has been in the news during the past months and featured in the October Bloomberg Markets Most Influential Summit. The support from such financial experts as Blythe Masters of Digital Assets Holding has sent a ripple across Wall Street and around the globe to financial leaders.
The application of the blockchain technology to date stamp in real time its accuracy to financial transactions and other related applications is embraced by major financial institutions such as JP Morgan Chase, while IBM is applying blockchain technology into its systems for business use in smart contact open source product.
Gil Luria, an analyst at Wedbush Securities, sent a note to clients and gave a forecast for the Bitcoin Investment Trust, “We believe bitcoin and its associated blockchain technology have the potential to disrupt the existing financial infrastructure over the next few years. We believe the value of the bitcoin currency (BTC) will benefit from this trend and therefore are initiating coverage of GBTC with an OUTPERFORM rating and $40 price target.” GBTC closed at $42 on Tuesday.
While gold slumped to $1135.90 an ounce on Monday, Bitcoin was considered the alternative to the metal. Bitcoin has become the serious disruption to the financial world.
