Bitcoin reaches 20-Month high - breaks $500 barrier

In the early hours of Saturday, the price of Bitcoin smashed through the $500 barrier for the first time in 20-months. As of this writing, the price is sitting at $540 per bitcoin. The price of the digital currency is still a far cry from its glory days during November 2013 when the price per coin went just over $1,100.

Various sources in the bitcoin world are pointing to a continued increase in the price of the crypto-currency in the near future. Jack Liu, chief strategy officer at OKCoin, believes that an increase in the price of the digital currency is likely due to the fact that costs paid to miners will decrease in the near future (causing less people to mine, which will subsequently cause less coins to be mined); by his reasoning, people could be convinced of bitcoin's long-term value and buy into the currency.

The increase in the price of bitcoin could also correlate to its increasing maturity. In the last two months alone, bitcoin payments have been switched on in Steam, an easy to use BitPay Visa card has launched for US customers, and a Swiss town has begun a trial allowing residents to use bitcoin to pay for various public services.

Speaking to Coindesk, Petar Zivkovski of the bitcoin trading network Whaleclub said:

“Emotions have taken over: Traders have taken their rational lenses off and are buying with the expectation of selling higher in a short period of time. Inevitably, low-entry buyers will rush to take profit and price dumps will ensue.”

Only time will tell whether the price of bitcoin takes a sharp rise like it did in 2013; either way, there will be plenty of bitcoin traders cussing themselves if they buy or sell and the price goes the wrong way for them.

Source: Coindesk | Image of physical bitcoins courtesy of Shutterstock

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