Bitcoin is back.
The cryptocurrency has been surging in US dollar terms over recent weeks, surging back through the $US500 mark, up around 170% from its lows of January last year. And in the past few weeks it has exploded by $US100 from the price on May 19th.
A watershed is approaching for the Bitcoin marketplace, when the reward for “mining” a block of Bitcoin using computing power will be halved from the current 25 Bitcoins at some point in the coming weeks. This will reduce the rewards for Bitcoin miners, potentially leading to a fall in supply. The website BitCoinBlockHalf.com currently estimates the cutover for the reduced rewards will now be on July 10.
There has also been talk of increased Chinese demand. As Beijing has been weakening the yuan, canny Chinese have been looking at ways to place their money into offshore assets. The Australian property market has been one suspected beneficiary of this, and what’s happening with Bitcoin may be a bit of the same, as the digital currency can be easily exchanged for US dollars.
Now to how that all looks:
Here’s the chart showing the recovery from the lows of 2015
And here’s a closer look at the past two weeks. It is holding comfortably above $US500 for now
This is still only half of what one Bitcoin was worth back in the frenzied buying of the cryptocurrency back in 2014, when the price smashed through $US1000.