Bitcoin price triples since start of year to break through US$3,OOO amid rising global demand
Trading of the virtual currency in China picked up again after the country’s major bitcoin exchanges officially resumed withdrawal services
The price of bitcoin recorded a new high, soaring to break through US$3,000 on Monday, buoyed by rising enthusiasm for the world’s most popular cryptocurrency.
The price hit an unprecedented US$3,108, three times the US$985 it was worth early this year.
Trading of the virtual currency in China picked up again after the country’s major bitcoin exchanges officially resumed withdrawal services in June. Volumes in China rebounded to above 30 per cent of all global bitcoin trading on Monday from about 10 per cent in late May, but still far below the 80 per cent it accounted for a year ago.
“Bitcoin trading in China started to become active again after the cryptocurrency trading platforms resumed withdrawals this month,” said Xiao Lei, a bitcoin expert and chief analyst with online gold trading platform G-banker. “The resumption triggered a short-term price rally.”
OKCoin, China’s largest bitcoin exchange, officially resumed withdrawals for its traders on May 31. Huobi and BTCC, other major bitcoin exchanges in the mainland, followed suit by announcing the coin withdrawals would again be available for all of their users.
The price rebounded, jumping to US$2,400 immediately after the announcement.
In February, China’s three largest bitcoin exchanges put a stop to withdrawals of the cryptocurrency as the government took measures to cool the market after the unprecedented price rally.
“I think the easing of China’s regulation [the resumption of withdrawals] is one of the factors to drive the digital currency price to jump above US$3,000,” said Xiao. “However, I believe the participation of global cryptocurrency enthusiasts, especially those from developed countries such as Japan and Korea, contribute much to the robust rise of the bitcoin price.”
The price climbed above US$2,000 for the first time in Japan in late May and the country’s trading volume accounted for 50 per cent of the global total. The market was buoyed by increasing demand from Japanese investors when BITPoint Japan, the company behind Peach Aviation, announced it would accepted bitcoin for ticket purchases and planned to allow other Japanese retailers to accept the digital currency. However, the Japanese government has also tightened the rules, stipulating that bitcoin exchanges should register with the state and comply with know-your-customer and anti-money-laundering regulations after the price rally.
“I do not see any sign of traders’ appetite for the digital currency abating and the price of bitcoin may remain robust if more and more overseas investors become involved in the industry,” said Xiao. “The biggest uncertainty in this industry is the possible tightening of rules by China’s government, who always take measures to curb the overheated market.”