Remember bitcoin’s big crash in September? It was caused by Chinese regulators cracking down on the cryptocurrency and figures such as Jamie Dimon talking it down. But for investors who held their nerve, the crash may as well have never happened.
On Thursday, the value of one bitcoin once again crossed the $5,000 mark, which is where it briefly was at the start of September, before everything went south. At the time of writing, at 6 a.m. Eastern Time, the value was around $5,150—up more than 4.5% in just a few hours.
So, amid constant talk of a bitcoin bubble, why is bitcoin’s price rising? For one thing, the Chinese effect has been shown to be limited—even though China has been a major country in the bitcoin community, in terms of both bitcoin “mining” and use, the regulatory crackdown there did not doom bitcoin elsewhere.
Another factor that may have helped propel the virtual currency to its current position is Russia. President Vladimir Putin said this week that Russia should regulate bitcoin trading in order to combat money laundering and the funding of terrorism, but, while this was widely reported as an anti-bitcoin move, he also said there should be no “excessive barriers” to the use of cryptocurrencies.
Alexey Moiseev, the Russian deputy finance minister, said earlier this year that the government was heading towards the official acceptance of cryptocurrencies, in part because their public ledger system makes transactions quite easy to trace.
The market may well be reading Putin’s most recent bitcoin thoughts as positive. Japan, too, recently started keeping cryptocurrency exchanges under a watchful eye in order to stop bitcoin’s misuse, but its licensing scheme for exchanges also pointed to the cryptocurrency’s slow move toward the mainstream.
Bitcoin isn’t turning out to be the anti-state free-for-all that some of its adherents wanted to see, but—for now—it’s entrenching itself in more and more countries. As for when it becomes less volatile, allowing more people to use it for regular transactions, only time will tell.