Back in February, we reported that Bitcoin transaction volumes were up 55 percent in 2017. Since that time, the leading cryptocurrency has only looked stronger. Bitcoin is trading at higher prices than most people thought possible, and some are predicting lucrative values in the coming years. Bitcoin isn’t a replacement for day-to-day currency for most of us, and may never become one. However, it is a serious, viable commodity, and it seems as if it’s going to be around for a long time.
What has driven us to this point? It wasn’t too long ago that even serious financial analysts were predicting a drop-off in Bitcoin’s strength and value. Let’s take a look at a few of the factors that have contributed to the rise in the cryptocurrency’s relevance and strength around the world.
Developing Countries Are Embracing As Expected
In 2016, there was an interesting article about Bitcoin’s appeal in developing countries that pointed out that Bitcoin looked like a solution in search of a problem. As an investment it can be exceedingly valuable, but as a currency, we don’t have any actual need for it. That’s because we have other means of making everyday payments. We have cash, credit cards, and accounts at established banks.
This isn’t the case for huge populations of people in developing countries, for whom currency that works like Bitcoin can be incredibly impactful. We’ve seen numerous organizations and companies seeking to take advantage of this concept by making cryptocurrency more available to these very populations. While it’s still early to measure the role that this has played in Bitcoin’s rise during the last two years, it’s not uncommon to hear cryptocurrency success stories from developing nations or countries whose economies have crumbled.
High-Volume Industries Are Getting On Board
One of the most persistent arguments against Bitcoin has been that you just can’t use it everywhere. For many consumers, there’s no point in exploring Bitcoin as a currency when the nearest grocery stores, drug stores, and malls aren’t accepting it as a valid form of payment. This is still true in a lot of cases, but we’ve started to see more major retailers embracing cryptocurrency. This is a trend that figures to continue in the coming years.
The biggest and most recent example was probably when the online gaming industry in the UK got on board. Last October NetBet, a major operator in this industry, announced that it would be allowing customers to fund their accounts using Bitcoin (via the Bitpay service). This is just one company, but it opens the door for the entire online gaming community to start making transactions via Bitcoin. This would in turn create a huge amount of transaction volume. The more we see things like this happening, the more Bitcoin will continue to thrive.
Regulators & Governments Are Easing Up
For at least a few years, government regulations were responsible, at least in part, for slowing the expansion of cryptocurrency usage. Not many countries outright banned this type of currency (though there were some that did), but they also didn’t embrace it in ways that made it easier to use. This is beginning to change, and that might be the most meaningful factor of all in Bitcoin’s surge.
As one article seeking to explain that surge put it, Bitcoin is being treated with a great deal more respect by governments and financial regulators. Examples included the Minneapolis Federal Reserve, Japan, and Chinese regulators all easing up on Bitcoin. This was either by recognizing it as legal tender or by relenting on controlling policies. There seems to be clear momentum among federal institutions to allow or even facilitate cryptocurrency usage.