As it continues to rise in value, it certainly seems as though bitcoin has taken the world by storm. While interest in the digital currency has certainly become strong all over the globe, there are some countries in which bitcoin investing has surged into a near frenzy.
According to Fox News,i more than $1 billion in bitcoins are now in circulation. Perhaps even more surprising are estimations that the global wealth of the digital currency now exceeds the total amount of currency stock of some twenty nations.
In early December, Forbes ii reported that India could very well be the next booming market for the digital currency. Along with there being a significant bastion of supporters for the currency in India, the government has recently reduced the exchange rate and exchange controls, thus providing strong incentive encouraging the use of bitcoin.
The price of the digital currency recently reached record highs during November. Much of that surge could be attributed to demand in China, according to CNN News. iiiFollowing the digital currency being featured among favourable reports in government backed newspapers as well as the state-operated television network, it continued to gain in popularity.
As reported by Forbes,iv when bitcoins were first created in 2009, they were worth literally nothing. Within four years, the value of a single bitcoin exceeded $1,400. The rapidly rising demand for bitcoin in China was largely met by a startup in Shanghai known as BTC China. Before long, BTC became the largest bitcoin exchange in the world. In a single day, approximately $100 million in the virtual currency was traded on the exchange.
While bitcoin has certainly proven to be popular in Asia, its reach is certainly not limited to that region of the world. According to some reports, interest in bitcoins in Israel has reached epic proportions. It has been reported that their central bank is considering recognizing bitcoin as a virtual currency and instituting regulations. The news comes on the heels of increased interest in bitcoins among Israeli citizens. As the exchange rates have increased, so has the interest in the digital currency. Interest has increased at such a rapid rate that Israeli exchanges are experiencing a difficult time in keeping up with it.
What is driving the surge of interest in bitcoin investing in so many nations? According to a report published by Fox News, the increased interest is due to decreased confidence in government currencies following a series of world events. For instance, the Cyprus government took 9 percent from its' citizens' bank accounts in order to resolve its own dire financial circumstances. Consequently, many Cypriots removed their money from banks and into other assets. While many have chosen to pursue the age-old practice of stashing it at home or have purchased gold, others are also investing in bitcoin.
Recent reports further indicate that the digital currency has also become quite popular in Iran. Following decades of US sanctions and as a result of this strict regulations, many citizens in Iran have embraced the idea of investing in Bitcoin. Just a few months ago, the first Iranian website dedicated to bitcoin trade opened.
The primary benefit of bitcoins for Iranians is that the digital currency can be exchanged for other currencies such as the dollar that citizens can keep outside Iran. Additionally, it can be extremely difficult for regulators to track transactions made using the currency, since there is no central server involved. As a result, Iranian bitcoin users are able to conduct business transactions on private networks and rest assured that their identities will remain hidden.
In this regard, the digital currency could prove to be an effective method for individuals who wish to avoid currency restrictions, sanctions, or high inflation. While many nations appear to be approaching bitcoins with extreme caution and have even taken steps to shut down bitcoin exchanges, that doesn't seem to be slowing down the world's interest in the digital currency.
To date, bitcoin has not exactly taken the United States by storm, but the number of people paying attention is certainly increasing. CNBC v reported recently that Fidelity is now making it possible for clients to invest bitcoins in their 409(k)plans. Interest in the virtual currency is also growing in Australia and Canada, where Bitcoin Foundation chapters were recently opened. The Foundation (https://bitcoinfoundation.org/) is an advocacy organization for the currency.
Even Silicon Valley has sat up and taken notice of Bitcoins. A San Francisco company, Coinbase, recently raised $25 million in venture capital funds for the purposes of expansion. The company is responsible for the facilitation of Biitcoin transactions between vendors accepting the currency and buyers. A number of other funds have been slowly accumulating significant amounts of the currency, as well. SecondMarket recently reported that they are holding approximately $65 million in Bitcoins.
Although the value of Bitcoins remains somewhat volatile, it would certainly seem that interest in the virtual currency is here to stay.
i) FoxNews.com. Lott, Maxim (2013, March 29) Digital Currency Bitcoin Surpasses 20 National Currencies in Value. http://www.foxnews.com/tech/2013/03/29/digital-currency-bitcoin-surpasses-20-national-currencies-in-value/
ii) Forbes.com. Worstall, Tim (2013, December 4) India Could Be the Next Booming Market for Bitcoin.
iii) CNN.com. Rooney, Ben. (2013, November 12) China Fuels Bitcoin Surge to Record High.
iv) Forbes.com. Hill, Kashmir. (2014, January 6) China Bites into Bitcoin.
v) CNBC.com. Cox, Jeff. (2013, December 15) Bitcoin Goes Big: Wall Street, Silicon Valley Aboard.