Valuations of cryptocurrencies like Bitcoin, Ethereum, and Ripple have skyrocketed in recent months, with all three of the leading cryptocurrencies making significant gains to market price and market capitalization since the beginning of the year. Ripple has reached a market cap of almost $10 billion and Ethereum's has grown to more than $20 billion in that time period. Prices have grown considerably over the same time span. A recent article by Tech Crunch suggests that these sudden and significant gains may be due in large part to activity taking place in China and Japan. <\/p>\n
China has become one of the world's largest hubs for cryptocurrency mining. Huge mining pools have formed thanks to the low costs of hardware and electricity in the Asian nation, and that has prompted China to account for more than 60% of the Bitcoin networks collective hashrate. Still, that position was tempered somewhat early in 2017, when the Chinese government began to crack down on the country's digital currency exchanges. This prompted a suspension of all withdrawals of cryptocurrencies in the country, and the market suffered heavily as it lost a substantial portion of its trading volume at one time. Tech Crunch points out that the government in China moved to change some of its regulatory framework in order to allow withdrawals to resume for certain top exchanges. As this news hit the crypto space in recent weeks, it inspired consumer confidence and may have contributed to a rise in currency values. <\/p>\n
Before this year, Japan represented only about 1% of all Bitcoin trading volume. This number has been increased by about six times in recent months, and Japan has begun to account for more than half of all Bitcoin trade volume on some days. Why the sudden increase? When liquidity in China stagnated thanks to government regulations, the market in Japan exploded. With the sudden gains in interest in the Japanese Bitcoin market, the worldwide currency market grew as well. <\/p>\n
There may be other reasons China and Japan have contributed to the gains that cryptocurrencies have made in recent months, too. The tight government control over the Chinese yuan may have prompted Bitcoin to become viable as an alternative asset class, with digital currencies becoming viewed as more accessible and less volatile than the fickle yuan. Simultaneously, as the Bank of Japan has used quantitative easing to create low or even negative interest rates, digital currency values in that country have risen, too. As consumers become less confident in the strength of the yen, they have increasingly turned to the decentralized digital space. Add to this the fact that more and more Chinese and Japanese major financial institutions are beginning to accept and adopt cryptocurrencies, and the role that these two countries have played in the industry's recent growth becomes even more pronounced. <\/p>\n
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Go here to see the original: Valuations of cryptocurrencies like Bitcoin, Ethereum, and Ripple have skyrocketed in recent months, with all three of the leading cryptocurrencies making significant gains to market price and market capitalization since the beginning of the year. Ripple has reached a market cap of almost $10 billion and Ethereum's has grown to more than $20 billion in that time period. Prices have grown considerably over the same time span. Continue reading
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