Forget the gold rushes of the 19^th Century and welcome to Bitcoin trading, the new gold rush. This claim might be farfetched in theory but when you look at the current price of Bitcoin, there is a clear sentiment in the cryptocurrency market, which technically makes it an interesting safe haven when compared to other currencies, including gold. Not that Bitcoin is the safest currency to own given its volatility, but because of the rise in value over the last few years, there is just too much gain to be ignored.

Bitcoin’s success has triggered the rise of several other cryptocurrencies including Ethereum, Litecoin, and Ripple among others. This is slowly reshaping the currency trading markets with several Forex brokers now offering cryptocurrency trading services for Bitcoin and Ethereum. It is common sense to assume that the rest will follow suit, which in turn, will continue to raise the popularity of Bitcoin and its counterparts.

The Cryptocurrency market is currently valued at about $80 billion with Bitcoin accounting for more than 50% of this figure. This is also the reason why just like any other currency, several startup platforms have cropped up to provide information and the means of bitcoin trading. In fact, according to various platforms traders can now earn bitcoin without spending another mainstream currency. Ideally, traders are required to purchase their first bitcoins using a mainstream currency or any other acceptable cryptocurrency in order to start trading Bitcoin. But it appears that this is no longer necessary.

Now, entrepreneurs have launched platforms where traders can earn satoshis, which can then be used to buy Bitcoin. Based on information obtained from various platforms, (one Satoshi is equivalent to 0.00000001 Bitcoin), so it is likely to take a while before traders can claim to have earned one Bitcoin by accumulating satoshis. A trader would need 100 million satoshis for one Bitcoin.

This illustrates just how people are becoming creative in their bid to join the Bitcoin rush. This pioneer cryptocurrency has gained nearly 240% over the last 8 months after rallying from about $700 per Bitcoin on October 30, 2016, to around $2,400 on July 11.

The current price level actually understates the feasible gain realized by those who invested in October last year and sold on June 11 this year. Bitcoin breached the $3,000-mark last month. However, the current pullback also highlights how volatile it can be for risk-sensitive investors. The chart below obtained from coindesk illustrates Bitcoin’s run over the last 12 months.

(Click on image to enlarge)

After rallying to an all-time high of about $3,000 Bitcoin has pulled back some $600 plus, in under a month to trade at about $2,383. And while in the chart it appears as though this decline has been gradual, it is good to note that there are days that the price of Bitcoin gained or lost $200-$300 per trading session.

Nonetheless, when you look at the overall picture from the point of view of long-term investing, it is hard to point out a scenario where investors lost money bar the massive slump of 2014-2015 that saw its price fall from about $1,000 in December 2013 to trade at about $230 in August 2015.

On the same note, recent reports indicate that skeptics believe the price of Bitcoin could drop by as much as 47% in what is viewed as a market correction. However, optimists remain positive on Bitcoin and believe that it could actually rise to trade at a price of about $6,000 in the foreseeable future according to a report published on CNBC. Based on the current price of about $2,400. This increment would represent a gain of about 150%, which means that despite the perceived high valuation of Bitcoin, there is still room to run.

Conclusion

In summary, it is unclear what really drives the price of Bitcoin. It’s not a capital asset so it’s difficult to apply certain valuation models. This leaves the only value drivers to be the forces of demand and supply. Then you wonder, why are people so hellbent on buying Bitcoin?

The answer is simple, Bitcoin is slowly emerging as one of the most popular currencies in the world. And am not just talking about cryptocurrencies. Due to its detachment from mainstream banking institutions, most business magnates use Bitcoin to keep their finances private.

It is also quickly emerging as one of the preferable ways of transacting business at a multinational level since there is no clear framework yet on how such transactions should be taxed. These are some of the catalysts that are fueling the Bitcoin rush. So, is it the new Goldrush?