Why Bitcoin price continues to go up?steemCreated with Sketch.

in #bitcoin7 years ago

If you check the Bitcoin price two/three years from now we have seen very parabolic growth in Bitcoin price during this time. It has gone up ten times in the past year or a 1000% return.

The increase in the value of Bitcoin is certanily unique in the sense of scale and how much has gone up, but... why does it continue to go up?

If we think about the fundaments of Bitcoin, they have not changed all that much in the past year. Yes, we have implemented a scaling solution in Segwit and the next 2x hard fork, but in my opinion it does not justify the huge price rise.

So, can the Bitcoin price rise be justify because of an increase of the number (volume) of daily transactions in the Bitcoin network, or in other word an increase in adoption by users?

If we look at those daily transactions, we can see they really has not increased all that much over the period of a year. It does not look like an uptrend in the number of daily transactions as we can see in the following picture:

More people are using Bitcoin now than ever but not enough more that we should see a 10 time increase in the value of Bitcoin over a year. Looking in the investing perspective in the long term, can Bitcoin continue to produce such increases in price despite the fact that the actual adoption of Bitcoin really has not done anything over the past year?

Two main explanations about why price continue to go up can be:

1 - The big players are coming in now and on the main stream media there is more info on Bitcoin. Also most investors who buy Bitcoin, they behave like silver or gold investors because the have no intention of using it directly for purchase or manufacture. They use it as a store of value.

2 - The Segwit 2x hard fork will split into two chains, each with its own set of coins. Holders of Bitcoin will be suddenly owning the same amount of Bitcoin in the new harded forced B2X blockchain (the question of which of these will be called the true Bitcoin is, for now, up in the air)

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Very good write up. Thanks for sharing.