Bitcoin price rises by 60 percent in a few days

In a few days, the value of bitcoin has risen from about 300 to 480 dollars. In October, the European Court exempted the trade in bitcoins from VAT, but according to insiders, the cause must mainly be sought in the financial situation in China or in a Chinese pyramid scheme.

The bitcoin price has been on the rise since mid-September, but especially in November an extreme increase can be seen in the price chart. According to Coindesk, bitcoin was worth about $312 on October 31, compared to $480 at the time of writing. This makes the value slightly higher than a year ago, when the price stood at 427 dollars. At the beginning of 2015, the value fell below $200.

There are several reasons for the price increase. On October 22, the European Court exempted bitcoin trading from VAT. This has probably had a positive influence on the value of the virtual currency. However, the financial situation in China is likely to have a much greater influence. The Chinese government recently imposed a limit on the amount of money that can be withdrawn abroad with Chinese bank cards.

Due to the strict financial rules, more and more Chinese are probably interested in alternative currencies such as bitcoin. Chinese bitcoin exchanges currently account for about 10 percent of all bitcoin trading. Also, all Silk Road bitcoins would now be auctioned. Speaking to Coindesk, Bobby Lee, CEO of the Chinese BTCC, cites this as one of the positive influences on the price.

BitcoinMagazine cites another possible cause. In China, people would be urged to participate in a large pyramid scheme using bitcoins. Participants of the Ponzi scheme have to buy bitcoins and donate them to the people who were already members.

Although Bitcoin’s value is currently rising, the virtual currency is still worth much less than at its peak in November 2013. At that time, Bitcoin was worth more than $1100. The price plummeted after bitcoin exchange Mt. Gox went bankrupt.