Bitcoin price has been going upwards from the past three weeks. The digital currency has broken almost all the barriers by reaching a two-year high, surpassing the $700 mark earlier today.
Bitcoin price, which was hovering at around $450 three weeks ago crossed the $500 and $600 marks in two consecutive weekends. This week, the same happened, but a bit late. The price rise started earlier this Sunday and continued until it crossed the $700 mark.
The price rise of this magnitude was not expected until the network halving, which is supposed to happen later next month. But the sudden demand for Bitcoin in the Chinese market seems to accelerate the price rise. As the value of Chinese yuan drops, people have started to invest in bitcoin to protect their earnings. The decentralized nature of Bitcoin makes it easier to invest, circumventing the strict capital controls introduced by the Chinese government that prevents the Chinese from investing in foreign assets.
As yuan digs itself deeper into trouble, following two rounds of devaluation by the government. The trading activity from Mainland China has sustained for three weeks. How long it will continue is, however, uncertain. Also, there are speculations that the price of digital currency may again increase for a brief period once halving takes place. However, this may soon take a downward turn as a certain percentage of miners may quit due to reduced returns and increased energy costs.
It is also worth mentioning that some of the mining companies are already feeling the heat of increasing energy costs and the requirement for more processing power. KnCMiner, the Swedish mining company recently ended up filing for bankruptcy due to increased costs of operation. We don’t have to wait for too long to know the fate of bitcoin as July is almost near and halving, round the corner.