Bitcoin shoots past $1,800 for the first time

Bitcoin shoots past $1,800 for the first time

Bitcoin is trading at another record high on Thursday. The cryptocurrency is up 4.59% at $1853.55 a coin after Ulmart, Russia’s largest online retailer, said it would begin accepting bitcoin, Cryptocoin News says. 

The announcement from Ulmart comes despite Russia’s central bank saying it would wait until 2018 to consider allowing the use of bitcoin and other cryptocurrencies. At the beginning of April, Japan’s regulators announced bitcoin is now a legal payment method in the country. 

Bitcoin’s has gained in 18 of the past 20 sesssions, a streak that has added nearly 60% to the cryptocurrency’s price. It began the run trading at about $1,170 a coin. 

Bitcoin has shrugged off China restricting trade, the SEC’s rejection of two bitcoin ETFs, and threats from developers to create a “hard fork” that would split the cryptocurrency in two, on its way to a gain of more than 95% so far this year. 

It has been the top performing currency every year since 2010, aside from 2014.

Traders are currently on the lookout for the US Securities and Exchange Commission’s ruling on whether it will reverse its decision to reject the Winklevoss twins’ exchange-traded fund.

Back in March, the SEC rejected two bitcoin ETFs, saying it “is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.”

A ruling will be handed down no later than May 15.

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Bitcoin soars past $1,700 for the first time

Bitcoin soars past $1,700 for the first time

Bitcoin seems unstoppable right now, topping $1,700 for the first time on Tuesday.

The cryptocurrency trades up 3.45% at $1,720.82 a coin, as trade grinds higher for the 16th time in 18 sessions. It has gained nearly 50% during its current streak.

Tuesday’s gain comes without any real catalyst as traders await the US Securities and Exchange Commission’s ruling on whether or not it will reverse its decision to reject the Winklevoss twins’ exchange traded fund.

Back in March, the SEC rejected two bitcoin ETFs, saying it “is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.”

Bitcoin has shrugged off China restricting trade, the SEC’s rejecting of two bitcoin ETFs, and threats from developers to create a “hard fork” that would split the cryptocurrency in two to post an 81% gain so far in 2017. 

There has been some good news as well. 

At the beginning of April, Japan’s financial regulators said that bitcoin was now a legal payment method in the country, and days later Russia said it would consider bitcoin and other cryptocurrencies in 2018.

Bitcoin has been the top-performing currency every year since 2010, aside from 2014. 

SEE ALSO: The price of Bitcoin just hit an all new high — here’s how easy it is to buy your first one

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Bitcoin just soared to a new $1,600 high — but the first investor in Snapchat thinks it could hit $500,000 by 2030

Bitcoin just soared to a new $1,600 high — but the first investor in Snapchat thinks it could hit $500,000 by 2030

Bitcoin has been the top-performing currency in the world in six of the past seven years, climbing from zero to a new high value of about $1,600.

But the cryptocurrency isn’t anywhere close to its potential, according to Jeremy Liew, the first investor in Snapchat, and Blockchain CEO and cofounder Peter Smith. In a presentation sent to Business Insider, the duo laid out their case for why it’s reasonable for bitcoin to explode to $500,000 by 2030. 

Their argument is based on increased interest in bitcoin, thanks to:

Bitcoin-based remittances

Remittance transfers, or electronic money transfers to foreign countries, have almost doubled over the past 15 years to 0.76% of GDP, data from The World Bank shows. 

“Expats sending money home have found in Bitcoin an inexpensive alternative, and we assume that the percentage of Bitcoin-based remittances will sharply increase with greater Bitcoin awareness,” the two say. 

Uncertainty

Liew and Smith said increased political uncertainty in the UK, US and in developing nations would help elevate the level of interest in bitcoin. 

“We believe Bitcoin awareness, high liquidity, ease of transport and continued market outperformance as geopolitical risks mount, will make Bitcoin a strong contender for investment at a consumer and investor level,” the two said.

Mobile penetration

Liew and Smith believe the percentage of non-cash transactions will climb from 15% to 30% in the next 10 years as the world becomes more connected through smartphones. There’s only a 63% global smartphone penetration and the total number of smartphone users is expected to soar by 1 billion by 2020. GSMA, a trade body that represents the interests of mobile operators worldwide, believes 90% of these users will come from developing countries.

This will make it possible for nearly everyone to have a bank in their pocket, and that should provide a boost for bitcoin as well. Liew and Smith say bitcoin could account for 50% of all of these transactions. 

Here are the basic model drivers that Liew and Smith used:

  1. A bitcoin price of $1,000 in 2017.
  2. That network users will grow 61x from now until 2030. “Put another way, we need a population of bitcoin users around a quarter of the Chinese population (or 5% of the global population) in 2030 to see bitcoin at $500k,” Liew and Smith told Business Insider. Bitcoin’s user network grew from 120,000 users in 2013 to 6.5 million users in 2017, or about 54x, and this could be just the beginning. Growth of that magnitude would produce 400 million users in 2030.
  3. The average value of bitcoin held per user hits $25,000. “As institutional investor cash in Bitcoin, sophisticated investors trading Bitcoin, and Bitcoin-based ETFs proliferate, we think the average Bitcoin value held will increase to around $25k per Bitcoin holder,” Liew and Smith said. Currently, with a market cap of $16.4 billion, and 6.5 million user count, the average user holds $2,515 worth of bitcoin. 
  4. Bitcoin’s 2030 market cap is decided by number of bitcoin holders multiplied by average bitcoin value held.
  5. Bitcoin’s 2030 supply will be about 20 million.
  6. Bitcoin’s 2030 price and user count total $500,000 and 400 million, respectively. The price is found by taking the $10 trillion market cap and dividing it by the fixed supply of 20 million bitcoin. 

It’s important to note that a lot could go wrong, too. News surrounding bitcoin has been rather negative as of a late.

China, which is responsible for nearly 100% of trading in bitcoin, has been cracking down on trading. The three biggest exchanges recently announced a 0.2% fee on all transactions, in addition to blocking withdrawals from trading accounts.

Additionally, the US Securities and Exchange Commission rejected two bitcoin exchange-traded funds, and will make a ruling on another one in the future. It’s not expected to be approved. However, Smith thinks bitcoin is still in its early stages.

“The SEC’s ruling wasn’t a surprise to us,” he told Business Insider. “We know that getting this sort of approval is going to take (a potentially long) time,” Smith said. “In the meantime, bitcoin is already simple to buy and hold and, as the asset continues to mature, we’ll continue to see an increase in the development and deployment of surrounding products.”

And while bitcoin hasn’t been granted regulatory approval here in the US, it is catching on elsewhere. On April 1, the cryptocurrency became a legal payment method in Japan.  

Another threat to the future of the cryptocurrency is that developers are threatening to set up a “hard fork,” or alternative marketplace for bitcoin. This would result in the split of bitcoin into bitcoin and bitcoin unlimited. However, Smith says not to worry.

Bitcoin has strong economic incentives to prevent this,” he said. “If the last two years of healthy contention and debate lead to a conclusion, it’s that Bitcoin is incredibly resilient and stable. In fact, the bitcoin Blockchain has operated for 7+ years with no downtime, a feat no other back-end system operating at this scale can claim.”

Anyone interested in bitcoin should also know that the cryptocurrency sees violent price swings that are uncommon among the more traditional currencies. Bitcoin rallied 20% in the first week of 2017 before crashing 35% on word China was cracking down on trading.

The cryptocurrency has regained those losses, and trades up about 67% so far this year. 

SEE ALSO: We bought and sold bitcoin — here’s how it works

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