The price of Bitcoin, the digital cryptocurrency favored by hackers and privacy buffs, has experienced a steady uptick over the past few weeks, hitting an all-time high of $305 over night. That number shatters the currency’s previous high of $265, which it reached in April 2013 before the bubble burst and its price tumbled back down to $60. The conversion tool Preev currently lists Bitcoin’s price at $296. Why the sudden increase? Here are three factors:
1. Wider mainstream acceptance
The cryptocurrency has faced its share of detractors and those who think it’s just a sophisticated way to launder money and purchase illegal drugs. But many well-known retail outposts have begun accepting Bitcoin, which will go a long way toward legitimizing it.
Besides online vendors like WordPress and Reddit, Thuisbezorgd, a Dutch company that arranges home delivery for a huge chunk of local restaurants, announced on Tuesday that it is now accepting Bitcoin. Various American brick and mortar enterprises have also begun accepting it, like the New York City bar EVR and a New Orleans-based antique shop.
2. Growth in China
Bitcoin has recently seen a huge influx of interest from China, with BTC China, a 2-year-old Bitcoin trading platform, increasing in traffic and becoming the world’s largest Bitcoin exchange. The shuttering of Deep Web drug market Silk Road may have caused the price to temporarily dip, but China’s interest appears to have buffered that decrease.
“I thought Silk Road is going to do some damage to the price,” Ugo Egbunike, director of business research at IndexUniverse, told Bloomberg. “But with BTC China buying this up — they seem to have picked up the slack.”
3. The launch of Silk Road 2.0
Former moderators and administrators of Silk Road launched a new, more secure version of the contraband marketplace yesterday. Since you need to own Bitcoin in order to make purchases on Silk Road, new and seasoned buyers clamoring to place orders may have buoyed Bitcoin’s price. Plus, Bitcoin weathered the shuttering of the original Silk Road pretty well, perhaps proving to investors that it’s not as volatile as previously thought.