Bitcoin surges again and returns with a bang

After causing a sensation in 2013, the virtual currency Bitcoin has been hit by negative news in 2014, and the bankruptcy filing of Bitcoin exchange Mt. Gox has made the blow to Bitcoin reach its peak. Since then, the trading price of Bitcoin has been hovering between $200 and $300. Now, Bitcoin seems to be making a comeback.

     Bitcoin prices have risen for seven consecutive weeks, the longest consecutive rise since November 2013. The current price has risen 123% from the low point in January this year and 50% from the low point in September .

     Industry insiders believe that under the impact of China's exchange rate reform in August and stock market turmoil, a large amount of capital has flowed out of China. In order to transfer funds, some investors use Bitcoin to circumvent China's capital controls .

     Bitcoin industry media Bitcoin Magazine reported that the Bitcoin trading price in China is $10-15 higher than in Europe and the United States, and the Chinese market is leading the rise in Bitcoin prices .

     Jack C. Liu, international director of bitcoin exchange OKCoin, said on Twitter on October 30 that bitcoin trading price reached a new high of $344 this year, and he also experienced his busiest day. He also said:

     Some Chinese traders expressed concerns about the yuan's exchange rate after the last devaluation, and mainland Chinese speculators showed interest in shifting to other assets after the stock market crash.

     In addition, thanks to the blockchain technology behind Bitcoin, the increasing interest and acceptance of Bitcoin by well-known financial companies has also driven investors to be bullish on Bitcoin. Goldman Sachs, Morgan Stanley and a large number of other companies have expressed interest in blockchain technology, hoping to improve securities, derivatives and lending businesses.

     Bloomberg quoted Wedbush Securities analyst Gil Luria as saying that Bitcoin has finally caught the attention of the financial industry. Under the influence of media reports and related investments by some large banks, banks and financial institutions are increasingly aware that Bitcoin and blockchain technology will become an important part of providing financial services in the future. He said:

     Investors realize that many future application scenarios will be based on Bitcoin blockchain technology, so they believe that if these application scenarios can eventually be successfully realized, the price of Bitcoin will also rise. It is expected that Bitcoin-related applications will be widely adopted in the next 10 years, and our target price for Bitcoin in the next 12 months is set at $400 .

     Another positive for the Bitcoin industry is that the European Court of Justice ruled at the end of last month that Bitcoin and other virtual currencies should be exempt from VAT in Europe, just like traditional currencies. This allows Bitcoin to compete with traditional currencies on a more equal platform.

     Ashraf Laidi, CEO of Intermarket Strategy, said that the EU’s ruling may allow Bitcoin to function as a “store of value.” He said:

     In June and July this year, Bitcoin surged as market expectations of Greece's exit from the eurozone intensified and China's gold reserves fell short of expectations. Last week's ruling by the European Court of Justice will also encourage exchanges, brokers and banks to launch Bitcoin-related tools such as ETFs for market trading, hedging or speculation. Bitcoin's role as a medium of exchange will be enhanced, and its "value storage" function may not exist now, but it may be realized next year.