A single bitcoin had a value of $455 in May of last year. Now, just one year later, just one bitcoin is worth a staggering $1,800 - a nearly 286 percent increase.

This increase has added over $2 billion to bitcoin's market cap, which now currently looms around 28.6 billion. That's over a 12 billion increase from the beginning of the year when its market cap was roughly $16 billion.

Bitcoin has seen these kinds of volatile fluctuations before. The crypto currency was valued at over $1,100 per coin back in later 2013 before plummeting down to $200 per coin just two years later. But with this latest upswing in value, the value of bitcoin is clearly reaching new heights. So, what's driving up bitcoin prices to these all-time highs? Well, it turns out there are a variety of different factors driving this marked increase in value.

Japan Has Decided to Recognize Bitcoin as a Legitimate Currency

Back in April, Japan made moves to accept bitcoin as a valid currency, which subsequently sparked a dramatic rush in demand for bitcoin. In particular, this move has sparked quite a lot of long-term investment in bitcoin as investors globally now feel more secure holding funds in the crypto currency now that it appears to be gaining more legitimacy. Investors in Japan specifically are frustrated with the ongoing inflation caused by Japanese Prime Minister Shinzo Abe's economic plan, viewing bitcoin as a much more secure and lucrative currency option for investment.

"Savers have nowhere to put their money," bitcoin expert Pavel Mateev told CNBC.¹ "Bitcoin on the other hand has outperformed every traditional currency by a near astronomical margin. Now that Japan's biggest financial institutions are embracing bitcoin, we are in blue sky territory in terms of valuation."

And there are currently indications that other countries might follow Japan's lead, which has also helped to make bitcoin much more attractive to regulators. The US the Securities and Exchange Commission, for example, is currently examining a judgment regarding a bitcoin-based exchange traded fund. Such an exchange-traded fund would give bitcoin even more legitimacy. Moreover, Russia is also reportedly looking to regulate bitcoin.

The Yuan is Depreciating

China is one of the world's biggest bitcoin markets. The value of the Chinese Yuan is declining, and investors are therefore looking for other ways to invest - and turning to bitcoin. This, combined with the fact that bitcoin has proved to be an excellent way for Chinese investors to escape the tight economic controls excerpted on foreign currency by the Chinese government, means that Chinese demand for bitcoin is at an all time high. Ultimately, much of bitcoin value is about supply and demand, just like with anything else in the free market. The Chinese market's increased demand means less supply, which in turn drives up bitcoin prices globally.

Prolonged Uncertainty in Global Markets

Much like gold, bitcoin is increasingly becoming to be viewed as a bulwark against the volatility of global economic markets. For example, right before the UK voted to leave the EU, many investors put their money in bitcoin, which caused significant price spikes. A similar effect was seen in the days after Trump's elections when fear stemming from the economic uncertainties of a Trump victory drove many to put their money in bitcoin. And lastly, when India abolished the 500 rupee and 1000 rupee notes, a similar effect was seen. When people perceive uncertainty or instability in traditional global marketplaces, bitcoin is almost immediately perceived to be a much more attractive investment option.

Some analysts have speculated that this kind of prolonged uncertainty in global marketplaces - including the Trump presidency and continued uncertainty over how Brexit negotiations will play out and what the implications of those negotiations will be - are prompting people to put their money into bitcoin.

So, what does the future hold for bitcoin? The bottom line is that given the current trends driving bitcoin's dramatic growth, it doesn't look like rising prices will slow down anytime soon. In fact, some analysts have even speculated that bitcoin growth will hit a staggering $3,000 by the end of the year. Others have even speculated that bitcoin could see much more significant growth levels, reaching over $8,000 by the end of the year. So ultimately, while there is a general consensus that bitcoin value will grow, just how much it stands to grow remains to be seen.

End of the day the value of bitcoin does not matter for those who like to use it for gambling online and/or for buying products and services over the internet. The value matters to bitcoin speculators and to those with large bitcoin holdings - wondering when might be a good time to take some profit.

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1) CNBC. Bitcoin's blockbuster week in two charts
http://www.cnbc.com/2017/05/12/bitcoin-price-rise-blockbuster-price-in-two-charts.html