Bitcoin's market value is fluctuating again.
Almost two months since it hit a three-year high of $1,000 on January 1, the virtual currency soared to a record high of $1,206 overnight, according to CoinDesk. Shortly after it dropped to a relative low of $1,124 and has since risen to $1,171 (at the time of writing). Read more: Beyond bitcoin. Your life is destined for the blockchain
Despite having a strong start to 2017, the price of the cryptocurrency started to tumble on the morning of January 5. Starting the day at $1,141, the price of a single Bitcoin dropped 18 per cent down to around $893 by 1:15pm GMT. This was the currency's largest drop in two years.
This latest surge is amid reports of the imminent US Securities and Exchange Commission decision on March 11 regarding the Winklevoss brothers' bitcoin ETF. If approved, it would see the currency being made more widely available to investors but there is no guarantee this will be the outcome.
On the other side of the coin, excuse the pun, is China central bank's recent decision to suspend bitcoin withdrawals until the bank could update its compliance system. This caused prices to drop, but as Elaine Ou, a blockchain engineer at Global Financial Access, wrote on Bloomberg: "Every time a government sets out to abolish something people like, the well-liked thing moves to where it can’t be stopped. Now it's happening in China, where the government has been trying to crack down on bitcoin."
Bitcoin's extremely positive start to 2017 was its strongest performance since December. That surge finished off a successful year for the blockchain-based currency, which started the year at $431 (£350) and had more than doubled in value by the year’s close. By the end of the year, it had risen in value more than any traditional currency issued by central banks in any country.
The virtual currency also reaped the benefits of a recent seven per cent fall in the value of the Chinese yuan over 2016. Most of the world’s bitcoin trading takes place in China, according to Reuters, and the country’s weak currency is said to be making more people consider bitcoin as an alternative currency for trading.
Read more: A simple guide to the blockchain and bitcoin
Market speculators will be keeping a wary eye on bitcoin though, as it is a notoriously volatile currency. In late 2013 it surged from less than $200 (£163) to an all-time high of $1,163 (£947) in the space of a couple of months, before collapsing to less than $400 (£326) in the wake of an attack on the Tokyo-based Mt Gox bitcoin exchange.
Released by its mysterious creator, Satoshi Nakamoto, in January 2009, the cryptocurrency lets users move money quickly and anonymously across the globe. Its focus on anonymity and independence has led to critics accusing it of being the currency of choice for drug dealers, fraudsters and dark web traders.
Bitcoin has performed well following a year where unpredictable political events caused markets to plunge. In the wake of the Brexit vote, the value of bitcoin against the dollar rose to more than $700 (£570) against the dollar as sterling plunged.
This article was originally published by WIRED UK
