Yes, the weakening yuan is responsible for the rise in the price of Bitcoin.
But what about some other efforts that have been playing complementary roles to push the top digital currency's price to a level that is far higher than what we have experienced in previous years?
And with the look of things, the reality is: these contributing factors are the mainstay of what is keeping the price of Bitcoin stable and unwilling to give in to any form of reversal.
Bitcoin’s price has gone up $100 in a month from about $605 as at September, 30 to up to $705 by October 28 - as at the time of this publication - and there has been a growing volume of daily Bitcoin transactions.
It may be too early to say, but the price of Bitcoin has been following a growing trend that have has difficulties in reversing back to its original lowest price of take-off. Some factors - such as the weakening Chinese yuan - push the price to a bullish stage then relax their grip on the market. Notice that when the effect of such factors subside afterwards, the price of Bitcoin doesn't get to revert to its initial point before the main push. These are some of the reasons that could likely determine the sustainability of such a new price point in the coming days.
Weakening Yuan
First thing first, the China effect is going to continue in the next couple of days - or weeks. According to Bloomberg, the Chinese currency’s share of global payments surged to 2% in September, the highest since January, according to data from the Society for Worldwide Interbank Financial Telecommunication. The nation’s exports unexpectedly shrank the most in seven months in September, according to official data. This is in addition to the People’s Bank of China’s weakening its exchange rate 4.4 percent in three days in August 2015.
A reduced supply factor
Hodling - or holding onto - the top digital currency, seems to be having a strengthening effect on the value and price of Bitcoin. This trend seems to take Bitcoin off the market, reduces the supply available to everyone else, and increases the price as a result. It could also mean signalling to whoever heeds that one values the asset enough to want to hold it, which in its own interpretation, could warrant keen interest from those who are yet to go into it.
With regards to the reduction in supply, references are also being made to the earlier anticipated block reward halvening effects are now manifesting. The shortage in supply makes new buyers appreciate what they have thus sustaining an increased value.
Greater legitimacy in public view
Independent institutions are sticking to the game. South Korea is putting measures in place for the spread of top digital currency in the Asian country which is home to some of the world’s top Bitcoin exchanges including Korbit, CoinOne, and CoinPlug. The government plans to develop and implement the Blockchain technology in the financial sector within the next year and institutionalize Bitcoin to operate better in the future financial ecosystem. This form of government involvement which is a form of legitimacy before the public eye will encourage more activities in the Fintech sector and its impact is likely to resonate across other sectors.
Iceland’s Pirate Party may win the national elections. When that happens, it could lead to a strong pro-cryptocurrency presence in the national parliament.
Switzerland became the first country in the world to have a city where you can pay for public services with Bitcoin. Now, it will start a Bitcoin wallet 24 hours a day from any of the SSB Ticket machines. There are plans to bring Bitcoin to public administration in Rome; top US banks will release a money transfer app that is built on a bank-owned payments network to compete with PayPal, Venmo, and Square Cash next year; and London’s largest banks are stocking up on Bitcoin in order to pay off cyber criminals who threaten to bring down their critical IT systems. Aside that these developments are pushing the adoption trend faster than expected, they have been key to on-board new Bitcoin users based on the instilled confidence in the market which is gradually overpowering the barriers of skepticism.
Predictions
The fact that the presumed escalation in the price of Bitcoin is just starting is another factor that is keeping the price at a sustained pace. New as well as existing Bitcoin users are poised to see the value of their buy maintained - or increased. Hence, the holding on, or in other cases, trading with it for more.
Depending on chosen angles, the macroeconomic outlook may show every user a differing view of how to speculate on the price expectations. What is clear is that, most users want to gain using whatever method they choose. They employ several tactics and technological trends to gain market insight. Predictions are the most important tool considered in this regard. One of such says that the key trends mentioned in a recent Google and Boston Consulting Group BCG study that says India's digital payments industry will grow to $500 bln by 2020, present a viable opportunity for Bitcoin adoption to grow in the world’s second most populous country. Some talked about how the approval of the Winklevoss Bitcoin Exchange-Traded Fund by the SEC is getting closer which, through its promise of accessibility and to protect users from various risks including computer fraud, will boost Bitcoin users’ confidence particularly in the US. Others are just blunt to fix a new and higher price for the top digital currency based on differing perspectives including those hinged on if Donald Trump wins the forthcoming US presidential election.