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Bitcoin Price Climbs Closer to $2,000 Mark on Rising Demand in Japan and Korea

May 19, 2017 at 22:38 by Yahia Barakah

The price of Bitcoin moved past $1,900 on Friday for the first time in the digital currency’s history, as demand from Japan and Korea continued to drive the market higher. Rising political uncertainty around the globe also added to the Bitcoin rally, as investors were tempted by growing geopolitical instabilities to store the value of their funds in the rapidly soaring virtual currency.

Investments from Japan have been pouring into Bitcoin since the nation recognized the digital currency as a legal payment method on April 1. The decision, which was the outcome of months of debate, opened the window for Japan to rise in position as one of the main global trade hubs of Bitcoin.

Japan had previously witnessed the collapse of Mt. Gox, which was the world’s largest Bitcoin exchange in 2013. The collapse was a catastrophic event that delivered a sharp blow to investors’ confidence in the virtual currency as more than 850,000 Bitcoins were reportedly stolen in the event, resulting in a massive price crash.

However, the new Japanese legislation increased hopes that Bitcoin exchanges in the country will be more regulated now than before. Many Japanese firms announced accepting Bitcoin payments and a number of exchanges for the virtual currency emerged following the legislation, which caused trading volumes in Japan to quickly surge. Japan now stands as one of the largest top five Bitcoin markets.

Bitcoin enthusiasts became more optimistic about wider international recognition for the digital currency, as Russia appeared to be considering legalizing the currency. Ulmart, the biggest online retailer in Russia, announced on May 11 that it will start accepting payments made in Bitcoin from September 1, which stoked rumors of an imminent recognition by the government.

Meanwhile in the United States, the Securities and Exchange Commission is reconsidering a ruling made in March that rejected a Bitcoin exchange traded fund proposed by the Winklevoss twins. US investors and financial institutions will have direct access to Bitcoin if the ETF was approved, which would cause a huge surge in the price of the digital currency.

The Bitcoin price also benefited from rising political uncertainties. A controversy that emerged this week around the ties that US President Donald Trump has with Russia raised concerns that the president might not be able to find enough political support to improve the economic growth. At the same time, a successful ballistic missile test done by North Korea on Sunday stoked fears that the nation is growing stronger and its rockets can now reach further than before.

However, some analysts warned that the rapid gains the Bitcoin price is experiencing have all the attributes of a bubble that could burst following the first major negative event.

BTC/USD rose to 1,969.4 on the Bitstamp exchange as of 22:20 GMT on Friday, the pair’s highest level in history, from 1,876.9 when the day began. BTC/USD ended trading last week at 1,682.0

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