The value of Bitcoin - will it continue to keep on rising?

Earlier this year Bitcoin went on a bull run that lasted months, and its still going. But what caused such a huge spike in value and will it's value continue to rise?

Demand from China, Japan and Korea, with China occupying the top spot.

With a share market and native currency in decline the Chinese needed a safe harbour and they found one with Bitcoin. But that rise in demand created a welcome dividend, a handsome profit and Bitcoin is still delivering! This has spurred even more investors from China and now they are buying Bitcoins and altcoins. Japan is now also a big player, Bitcoin is legal there now.

But for how long will this continue?

The rise in Bitcoins value has created a level of careless confidence. Most of us just assume Bitcoin will continue to rise indefinitely. Assumptions based on what happened yesterday are dangerous, so perhaps we should all take a deep breath, stand back and take stock.

It has been said the percentage of influence from China/Korea/Japan is as much as 90%. So we are all hedging our bets on those countries and hoping the political and social climate will be stable into the foreseeable future.

What happens if the Chinese government spits the dummy out and makes Bitcoin illegal to buy, hold or spend? Then its all over and the price of Bitcoin will start to come down, slowly but surely.

Would the Chinese government do that? Most definitely, 1984 policies are still alive and kicking. The Chinese government has a problem, they have imposed a $50K USD limit on the amount each individual can take out of the country each year. But it's not working, it never did. HSBC and some other more dodgy banks could sneak out your RMB through a backdoor and overseas and the government was none the wiser, but they are now and that backdoor is being squeezed shut.

Solution? Bitcoin!

What better way to export the local currency! Just send your son or daughter overseas on a student Visa, have them purchase some real estate in an area where property prices are expanding and hey presto, you have an income earning asset and your RMB is now safe from harm. Your children live in the property, rent out the spare rooms and pay the mortgage off whilst you slowly supplement the payments by sending them Bitcoins to exchange.

Or exchange for Bitcoin and use the funds to invest into foreign stock markets. Where to get Bitcoin in China? You could find a broker, do a cash deal with your friendly local Bitcoin miner, or set up a VPN at home and utilise a foreign Bitcoin exchange, the latter seems to be the most popular way.

Well the Chinese government has woken up to that now too and have conducted a number of raids on Bitcoin exchanges and are stepping up the act. The Chinese government are clearly nervous about Bitcoin, for a number of reasons, its not all about the currency export issue.

China has banned Google, Facebook, et al and they now have their own versions. Their great firewall is supposed to stop netizens from discovering the evils of the west, but the Chinese have discovered VPN's and SmartDNS services. However, now there are rumours the government may ban VPN's, albeit with a few exceptions. If thats the case it will cripple the Chinese Bitcoin market as the door will be closed to accessing foreign share and crypto exchanges.

The big rise in the value of Bitcoin started around May this year, it's on a bull run, will it continue? Please consider this may all be a beautiful illusion that could dissolve at any time.

So please invest wisely and stay updated on what is happening in China..

Cheers Jim!

img source: bitcointrader.org.au