The price of bitcoin surpassed $2,000 for the first time in history on Saturday, pushing the cryptocurrency to a new ATH amid rising trader interest.
The currency’s price rose as much as 3.5% over the past 24 hours, and nearly 15% over the past seven days. By rising above $2,000, bitcoin’s price has surged more than 100% this year.
Now that the digital currency has surpassed this psychological level of $2,000, it could experience some significant tailwinds.
While many agreed that bitcoin’s rise above $2,000 would spur greater media coverage, the factors that drove the currency’s price above this level seemed a bit more complex.
One development that has coincided with bitcoin’s sharp price gains over the last several months is the rising interest of traders, as measured by trading volume at major exchanges. Earlier this month, both Kraken and Poloniex announced that they were experiencing surging transaction activity.
Another factor that has helped drive bitcoin prices is the rising influence of Japan in the bitcoin markets, where the technology is now regulated. The Japanese yen is the single largest currency being exchanged for bitcoin, accounting for more than 45% of the money flow into bitcoin at the time of report, according to CryptoCompare data.
The US dollar came in a relatively distant second, making up approximately 30% of the money flowing into bitcoin, according to additional CryptoCompare figures.
This increase in the use of the Japanese yen comes after Japan moved to formally recognize bitcoin as a legal method of payment starting 1st April. The country’s lawmakers enacted legislation that both classified the cryptocurrency as a type of prepaid payment instrument and also caused it to fall under anti-money laundering and know-your-customer rules.
Bitcoin prices have even been rising sharply in spite of the cryptocurrency’s ongoing scaling dilemma, an ongoing issue with its transaction capacity that members of the bitcoin community have been trying to resolve.
Developers could address this problem by increasing block size, increasing the number of transactions that can fit into an individual block through Segregated Witness, or both. Thus far, the bitcoin network has failed to rally the support needed to bring about any such changes.