Bitcoin is back! Or at least, there are positive signs indicating that bitcoin might not be as dead as everybody thought. Bitcoins are now trading at $547.40 on Bitfinex (the largest USD/bitcoin exchange according to Bitcoinity). And it represents a big 21.4 percent price jump over just four days.
Today’s price represents a 21-month high. Surprisingly, bitcoin prices had been relatively stable for the last two months before this weekend’s jump.
Increasingly, bitcoin’s price variations are correlated with macroeconomic trends in China. These trends tell us that China still fears a deflation.
And bitcoin is perceived as an alternative asset class for many people in China. Similarly, the Chinese government cloud cracked down on peer-to-peer lending, forcing lenders to invest in bitcoins.
Other than China, there are reasons to be optimistic about bitcoin right now. In late 2015, many bitcoin companies started arguing in favor of a bitcoin fork to increase the transaction processing capacity. It led to a very ambitious roadmap for the original Bitcoin Core project.
In the coming months, many Bitcoin Core updates are going to make bitcoin and the bitcoin blockchain more robust and more future proof. I’m particularly excited about lightning networks — these networks would make it possible to send bitcoins in seconds. It would turn bitcoin into a viable alternative to existing payment networks.