Bitcoin price rise again

Bitcoin has hit a two-month high and crossed $8,000 mark on Tuesday as the cryptocurrency showed rebound from its downturn that continued for months. Bitcoin has surged reportedly on the back of news that the US Security and Exchange Commission (SEC) is weighing the possibility of establishing bitcoin exchange-traded fund (ETF).

Bitcoin had surged to its highest in December when it topped $19,000. Meanwhile, in India, the virtual ban on cryptocurrency by the Reserve Bank of India continues to be in place. Since the ban, the cryptocurrency trading platforms have started using peer-to-peer lending (P-2-P lending) for deals.

Last Friday, the RBI defended its move to put a virtual ban in the Supreme Court, saying that it is necessary to regulate the cryptocurrencies as they encourage illegal transactions and impact the international flow of funds. The RBI order kicked-in from July 6, in which the central bank asked regulated banks, financial institutions, e-wallets and other entities to cut ties with anyone doing business in cryptocurrencies.

Launched in 2009 by a person or a group of persons using the name Satoshi Nakamoto, Bitcoin gained significant importance when it topped $5,000. Within two months, Bitcoin leapfrogged from $5,000 to $18,000. But since then it has tumbled to about $6,000 before rising again. However, as compared with prices at the same time last year, Bitcoin is $5,297 or 196.89%.

A report by Federal Reserve of San Fransico in May said that the reason behind Bitcoin tumble could have been Bitcoin Futures, which allowed “pessimists to enter the market and contributed to the reversal of the Bitcoin price dynamics”. It opened gates for buying and selling contracts with a lower delivery price in future than the spot prices. The report said that the decline of Bitcoin was consistent with the collapse of the US housing market in the 2000s.