The last time a bitcoin was fetching $700, the cryptocurrency was in free fall from a high of $1,000, but now renewed interest in the digital currency together with a weakening Chinese yuan and an imminent “halving” are pushing the price to its highest level in 30 months.
On Monday the price of a bitcoin reached $695 on CoinDesk’s Bitcoin Price Index, a figure last seen in February 2014. The latest surge comes after a month of renewed interest in the cryptocurrency, seeing the price just from around $450 on May 26.
The latest price surge has pushed bitcoin's market capitalization to over $10 billion for the first time, and has seen it rise from $7 billion in the space of two weeks.
There appears to be no single reason for the price surge, though some have credited a weakening Chinese yaun for pushing interest in the cryptocurrency in China. There is also a growing sense that the blockchain technology which underpins bitcoin is about to become much more widely used including by banks and financial institutions — with bitcoin getting a boost as a result of its association with blockchain technology.
However, one of the main drivers of the price surge in recent days is an imminent event called a bitcoin halving, which will see the rewards for mining bitcoin halved, a technique written into the code of bitcoin by its creator to limit the number of bitcoins produced.
At some point on July 10, the number of bitcoins available to the person who adds a valid block to the bitcoin blockchain will go from 25 to 12.5. “The halving of the supply of Bitcoin is attracting many retail investors,” Jack C. Liu, chief strategy officer at OKCoin told Bloomberg. “More broadly, we continue to see follow-through from the blockchain hype cycle translating to interest in bitcoin the asset.”