Bitcoin’s price has been rising so fast over the past two months people don’t know what to expect next. In Asia, the price is climbing higher than most western exchanges. Now many people are wondering how healthy the current price spike is and whether or not the digital currency is in a bubble that might be followed by a deep correction.
Cryptocurrency Fever In Asia Is Pushing the Price Upwards, but How Long Will It Last?
Everybody is extremely focused on the price of bitcoin and a number of altcoins increasing in value exponentially. Some people think the digital currency’s value gains are moving too fast while others believe overall global demand supports the price rise. Charles Hayter, founder, and CEO of the cryptocurrency data analysis firm Crypto Compare reached out to Bitcoin.com and detailed his opinion of the situation bitcoin markets are facing.
“Media begets more price rises and triggers more exposure and buying,” explains the Crypto Compare founder. “The ICO phenomenon is contributing too as traders wash in and out of the major cryptos chasing and pumping the next ten bagger.”
Japan, Korea, and Asian interest is causing the price to rise and dragging up Western prices on the back of regulatory moves as well as scaling — The party will end as Asian premia comes back into line with Western markets or even drag them down as panic selling takes hold. The exact trigger is yet to be seen although last time it was Mt Gox.
A Mixture of Factors Driving the Price
Currently, Asian bitcoin markets are seeing massive trade volume and higher prices per BTC in contrast to most exchanges worldwide. According to Hayter and Crypto Compare statistics, “Korean markets are buying Bitcoin at over $4000 – a $1400 premium or 50% premium to the USD price. Korean volumes hold 11% of total bitcoin trading.” Furthermore, prices are higher than the global average in Japan, India, and other regions as well. Alongside Bitcoin fever, Korea, and other Asian countries are also seeing significant Ethereum trade volume, as well as higher ETH price spreads.
Hayter believes the recent scaling proposal introduced by Barry Silbert may have given traders some optimism, but he believes it is still “unclear if the agreement can be implemented.” However, because some companies like Bitmain and others who opposed supporting Segwit in the past have agreed to the compromise, Hayter believes we are moving in the right direction.
So it’s a mixture of factors driving the price – the scaling solution is removing the negativity that surrounded bitcoin in the Western world, but the Asian markets with their premia are dragging the price higher with their irrational exuberance.
“Both Bitcoin and Ethereum markets have seen global dislocation as price premia have appeared specifically on the JPY and KRW markets — Asian and more specifically Korean fever is taking hold,” Hayter adds.
What do you think about Asian markets driving up the price? Do you agree with Charles Hayter that we are in a bubble at the moment? Let us know your thoughts in the comment section below.
Images via Shutterstock, Crypto Compare, and Pixabay.