FX.co ★ Bitcoin might be biggest winner of 2017

Bitcoin started the new year with a bang. The digital currency jumped above $1,000 for the first time in the last three years. Altogether, bitcoin rose by 125 percent in 2016. In the first day of 2017, bitcoin surged by 2.5 percent to $1,019.94, the highest since December 2013.

We shouldn’t forget that, since its creation, bitcoin proved to be a highly volatile currency. First, bitcoin jumped ten times in two months in late 2013 when it rose above $1,100, then the cryptocurrency collapsed down to $400 in a few weeks after the hacker attack on the Tokyo Stock Exchange. Still, the last two years bitcoin remained relatively stable: the biggest daily growth in 2016 was around 10 percent. So, even though bitcoin is still very volatile in comparison with other currencies, its fluctuations are significantly lighter than during 2013 trading, when each day the price jumped up and down by almost 40 percent. The growth of bitcoin in 2016 may have been triggered by an increase in demand for the cryptocurrency in China due to a weak yuan. During 2016, the yuan lost 7 percent against the US dollar and, as a result, showed the worst results in the last 20 years. Statistics show that China is the most active bitcoin trading market. Bitcoin, the most popular cryptocurrency generated by thousands of computers all over the world, is used to transfer money around the world, because it is fast, anonymous and virtually not controlled by any authority. The cryptocurrency is attractive for those who want to elude capital control systems that the Chinese government uses.

The Russian Ministry of Finance is actively lobbying for a law that bans all bitcoin activities in Russia. But for now, the draft law is voted down. Moreover, the first bitcoin transactions in Russia have been conducted in 2016 by S7 Airlines and Alfa-Bank. However, bitcoin is still far from the record high of $1,163 reached on the Bitstamp Exchange at the end of 2013.