The price of Bitcoin went up by over 210% during the past year, trading from about $450 in mid-2016 to record-breaking levels of $1,400 in May 2017. In the eight years since its founding, Bitcoin has braved skepticism, rejection, and experienced volatility, to the present day, when it’s slowly being recognized by governments and even dubbed as an emerging asset class. Here’s a look at the dynamics behind Bitcoin’s rising price.
Bitcoin was created in the wake of the 2008 global financial crisis to operate outside of central governments, banks and financial institutions. Over these years, Bitcoin’s framework has challenged regulators, as most of them struggled to find ways to bring it under control. This led to some countries banning it or making it illegal, while some others remained observant and the rest worked out ways to tax and regulate its operations. However, the ‘uncertainty’ angle remained in sight. Although there still isn’t a very clear stance by many countries, a number of nations are coming out in support of the cryptocurrency.
Japan has recently recognized Bitcoin as a legal method of payment, although it continues to be treated as an asset, and not as a currency. In India, the Department of Economic Affairs, Ministry of Finance has constituted a committee to examine the existing framework around Virtual Currencies (VCs). The committee will not just examine the present status of VCs in India and around the globe, but will also suggest measures to deal with consumer protection and money laundering. The committee will be submitting its report by July.
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