Bitcoin, the world’s most popular digital currency, has been on a roll – but no one is really sure why.
The alternative theory for China is the country may be in the grip of a massive Bitcoin-based Ponzi scheme called MMM; Bitcoin Magazine quotes a spokesperson from another Chinese Bitcoin exchange called Huobi as saying “We believe that most of the investors hold a positive attitude towards the future development of Bitcoin industry”.
New research shows the rise of bitcoin is to become the world’s 6th largest global reserve currency by 2030, and that the top 100 global financial institutions are set to invest $1bn into blockchain projects in the next 1-2 years.
Magister Advisors sees the initial use of Blockchain is to typically not replace core infrastructure activities such as wire transfers, but to complement them, often by storing “meta-data” in areas such as settlement and clearing.
Another theory points to the impending auction by US Marshals of Bitcoin seized from Silk Road during the raids past year.
While the theory is denied by a few, there’s no question that something is going on in China with trading on BTC China, the biggest Bitcoin exchange globally surging to exchanging 80,000 Bitcoin a day lately, up from a more recent average of 20,000. “Blockchain, more fundamentally, will become the default global standard distributed ledger for financial transactions”, said Jeremy Millar, a partner at Magister Advisors, in a statement released by the organization.
“Ironically bitcoin has attracted negative publicity over its short life because attempts to rig it have been flagged by the Blockchain technology that underpins it”, he added. “Growing vendor acceptance and the adoption of Bitcoin in developing markets are creating a pincer movement that will lead to widespread business and consumer acceptance and adoption over time”, he said.
Bitcoin soared over $450 for its first time this year according to the Coin Desk Bitcoin Price Index today.
Interest in speculation has even creation of a number of bitcoin “money market funds” or ETF equivalents, but its usage still remains high in developing markets and 90 per cent of the transactions occur in those regions, according to the largest Bitcoin wallets, the group said. Traders are addicted to volatility and we mustn’t underestimate the significance of speculation.
The report says the actual number of transactions is being “underreported by an order of magnitude” by not factoring in “off-chain transactions”.