It’s unclear what is driving up the price of bitcoin, especially considering the US Securities and Exchange Commission rejected a bitcoin exchange-traded fund application in March, citing security concerns. The currency’s trading value got a noticeable boost when the SEC announced a few weeks later that it would reconsider. But American regulators aren’t the only influencers behind the springtime surge. Bitcoin’s market capitalization rose from $18.34 billion on April 5, to $22.9 billion by Monday, May 1, according to Coinmarketcap.com data.
Overall, Bitcoin is having a great 2017 so far, steadily increasing value as global power players warm up to cryptocurrency. In April, Japan officially recognized Bitcoin, and other cryptocurrencies of its ilk, as legal tender. “The Japan virtual currency act has likely had a major impact, as there has been a lot of buzz in Japanese media over the ruling over the last few months,” Gatecoin CEO Aurélien Menant told CNBC.
Meanwhile, Russian Finance Minister Alexey Moiseev told Bloomberg that Russia hopes to recognize cryptocurrencies like Bitcoin as legal tender by 2018. According to CoinNewsAsia.com, India is also eyeing this blockchain tender, contemplating both official recognition and a Bitcoin tax since the recent change in Indian bank notes made digital currency more popular. Engadget reported Bitcoin use doubled in India this winter when the government banned both the 500 and 1000 rupee bank notes.
And Bitcoin isn’t the only digital tender that reached an all-time high over the past week. Investopedia cited platforms such as Ethereum, Ripple, Dash and Monero as fellow cryptocurrency networks with significant market gains. Some even reportedly had double-digit gains in just one day. CoinDesk reported the value of the cryptocurrency Ether also reached an all-time high by Monday, $80 per token. Ether hails from the blockchain network called Ethereum, which like Bitcoin utilizes an open source software platform. Ethereum has quickly attracted interest from companies like Microsoft and JPMorgan Chase. Plus, it is already regulated by the New York State Department of Financial Services, as part of the recent collaboration with Coinbase Inc.
Bitcoins may be worth more than Ether tokens right now. However, the slow march towards regulation and government recognition stunts Bitcoin’s prospective growth. “If Bitcoin was going to become any kind of valid currency with widespread appeal,” British investment advisor and “Money Mania” author Bob Swarup said, according to The Telegraph. “Then it really needed to grow up and growing up in the currency world means accepting the influence of the state and regulation in some way.”
It’s hard to tell if the long term value of these currencies will continue to rise, or if the market is experiencing an unprecedented peak. There are now reportedly over 100,000 vendors using Bitcoin, including Expedia, OkCupid and Reddit. Only time will tell if the rise in market value will prompt government agencies to fast track widespread regulation.