The research found that transaction volumes continued to be concentrated overwhelmingly on the exchanges, with Bitcoin now trading at values almost 50% higher than at the beginning of 2016.
According to the new research The Future of Cryptocurrency - Deep Dive Data & Forecasting 2016-2021 – the rise in values could be attributed to 3 key factors.
First factor is uncertainty over Brexit – the research argued that Bitcoin’s value is to a significant extent dependent upon economic uncertainty and political instability. Bitcoin’s price rose in the weeks leading up to the referendum, dipped briefly but sharply when it appeared that Britain would vote to remain in the EU, before recovering when the true result became apparent.
The second factor is the continued weakness of the Chinese economy – the overwhelming majority of Bitcoin trading occurs on Chinese exchanges, while the continued weakness of the Chinese economy has seen investors using Bitcoin as a refuge against expectations of a further fall in the value of the yuan.
The last factor is the reduction in money supply – the imminent ‘halvening’ whereby the amount of Bitcoin being introduced by mining in a set time period will halve is also pushing its price upwards.
The research also argued that Bitcoin adoption in the retail space was likely to remain limited to a niche audience, with only a small number of websites seeking to offer it as a payment option.
Juniper Research is an analyst house in the digital commerce and Fintech sector, delivering research into payments, banking and financial services.
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