Posted by: DeepDotWeb
June 3, 2014
Last week, Bitcoin crossed the $600 barrier for the first time since March 20 and is currently sitting at $660, gaining 4.7% in value over the past 24 hours, or 65% in the last month. Significant rises in value were spurred by announcements that Apple’s app store and DISH Network would start accepting the currency.
The coin had suffered a gradual decline and bottomed out with lows of $360 in mid-April, but from 19th May, it has been on a strong upward trajectory.
Bitcoin’s price growth was caused by a number of factors. Firstly, just as the value seemed to be settling for a short period around 26th May to 29th May, the coin made gains on news that US satellite service provider DISH Network will start accepting bitcoin payments later this year
The Colorado-based company is one of America’s largest content providers, and has over 14 million pay-TV subscribers. DISH will start accepting payments via bitcoin in Q3 2014, though is yet to reveal an exact date. Once it does, it will be the largest company to accept bitcoin payments yet. DISH reported revenues of $13.9 billion last year.
Yesterday, Apple revealed plans that its App Store may start allowing bitcoin transfer apps. Although its policy has previously been restrictive to digital currencies, an update to its App Store Review Guidelines in the Purchasing and Currencies section said: “Apps may facilitate transmission of approved virtual currencies provided that they do so in compliance with all state and federal laws for the territories in which the app functions.”
The company previously operated anti-bitcoin policies, removing wallet apps Bitcoin Wallet and BitPak, as well as Coinbase and Blockchain. Despite enthusiasm as to the tech giant’s new stance on bitcoin, clarification is needed on what Apple considers an “approved virtual currency”.
In addition, the Bitcoin2014 conference in Amsterdam also recently acted as a catalyst for uptake of the currency. The conference took place from the May 15 to May 17, directly preceding a 30% jump in value.
Price increases after those two events have likely been spurred by fresh investors entering the market, according to Forbes, which predicts it was likely caused by institutional investors along with previous investors increasing their positions.
US financial services firm Wedbush Securities, which has the goal of becoming the first financial institution to accept bitcoin, offered a further vote of confidence for the currency with the news it expects broad implementation within one to three years. In a report titled “Timing and Sizing the Era of Bitcoin”, it stated that “bitcoin related technologies will disrupt payments markets and other trust-based markets within the next few years and for decades to follow”, however, “broader implementation of the technology is still 1 – 3 years away.”
The report notes a doubling of venture capital investment over the past three months as well as potential uses for the coin in Machine-to-Machine communications within the Internet of Things, and use in reducing DDoS attacks and spam mail. Unsurprisingly, the firm is bullish on bitcoin.
Meanwhile, on Reddit, user TheDJFC accidentally transferred 800 bitcoins (about $480,000) to the now defunct MtGox bitcoin exchange. After having previously sent 300 coins to the exchange a year ago, TheDJFC accidentally made the transfer yesterday. Commenters pointed out that he may have to submit a claim to the bankrupt company by 28th Novemner, 2014, in time for the investigation of claims on 25th February, 2015. Sofa sleuths wrote that Japanese law states the poster is legally entitled to his funds being returned, and suggested he contact the trustee assigned by the bankruptcy court.
Policy and government news
A positive development for the crypto currency saw bitcoin miner B.J. Guillot opening his run for Congress. Guillot disagrees with the IRS’ guidelines that consider bitcoin as property for federal tax purposes, meaning all virtual currency transactions are subject to capital gains and losses. To remedy this, he’s vying for a place as the regulator’s regulator and is accepting bitcoin donations to fund his race.
Not all the week’s news was positive however, with a number of government moves that may slightly stunt the currency’s implementation. Poland is placing a 23% value-added tax on the sale of mined bitcoins after a Polish bitcoin miner asked the tax authority for guidance, assuming the coin was exempt as it does not have a material form, and is not considered a commodity. The new guidance may end voluntary reporting of bitcoin profits, and have a strengthening effect on the country’s black market.
Argentina’s central bank (BCRA) also struck a glancing blow against the digital currency, issuing a warning that digital currencies are not legal tender and stating they have the potential to facilitate money laundering and illicit finance. Due to the Argentine Peso facing inflation rates of over 100%, Argentinians are opting to trade their fiat currency in for bitcoin. The trend in the country has seen a number of digital exchanges open as a result.