Bitcoin3 Reasons Bitcoin Is Booming Again, Price Nears $550Jeff John RobertsHere we go again.After a long stretch in which the price of bitcoin held stable, the world's most famous digital currency is on the move again—and this time it's heading straight up.On Tuesday, bitcoin was nosing towards $550 per unit, which is even higher than August 2014, when bitcoin prices reached almost $533.The recent move also ends a six-month period of relative tranquility in which prices mostly hovered between $350 and $450.If you carve out artificial highs from the three month Willie-bot/Gox bubble, #Bitcoin now flirting with all-time mkt cap high (vs 6-2-14).- Ryan Selkis (@twobitidiot) May 30, 2016It's also a remarkable improvement from a year ago when the currency was in the gutter.On June 1, 2015, one could buy a bitcoin for $226.To get the flavor the recent uptick, here is a screenshot from Coindesk's price index, showing prices in the last week:RelatedFortune 500Hackers Leaked ‘Orange Is the New Black’ Despite Receiving $50,000 RansomFortune 500Hackers Leaked ‘Orange Is the New Black’ Despite Receiving $50,000 RansomSo what's behind the recent surge?

It's hard to say for certain since the workings of bitcoin are often inscrutable to outsiders, while those who are in the know typically have an agenda to push the price up or down.That said, here are three explanations for the current price jump.Reason 1: Mining bitcoin is about to get more expensiveRecall that bitcoin is "mined" by people with specialized computers that solve cryptographic puzzles.(This process also serves to provide a record of bitcoin transactions.)comprar bitcoin bogotaIn return for solving the puzzle, the miners receive 25 bitcoins.The nature of bitcoin is deflationary, however, meaning that fewer bitcoins are mined as time goes on.đào bitcoin bằng cpuCritically, at some point in the near future, the reward for miners will drop from 25 bitcoins to 12.5 bitcoins.bitcoin 500 supercomputers

(See this Bitcoin magazine article for more).It's unclear how this price cut, which will take place when bitcoin block 420,000 is mined (probably in the coming weeks), will affect the price of in the market.But several news reports claim the recent surge in the price may be driven in part by the impending stress on the mining supply.Reason 2: Hype over a new digital currency is reigniting interest in bitcoinTech types have been buzzing about the emergence of Ethereum, a new blockchain technology that is winning big support from banks and venture capitalists.You can read a good explainer here, but the short version is that many think Ethereum is faster and more reliable than bitcoin, and could even supplant it as the pre-eminent digital currency.The emergence of a rival currency might, of course, seem bad for bitcoin.A Quartz article asks, however, if a price surge for ethereum might instead serve to rub of on bitcoin.But so far, there is little evidence that the price of the two currencies is strongly correlated.Get Data Sheet, Fortune’s technology newsletter.Reason 3: China, China, ChinaThis seems the most convincing explanation for the bitcoin surge.

According to the Wall Street Journal:Huobi and OKCoin, two Chinese exchanges, now collectively account for some 92% of global trading in bitcoin.The surge in bitcoin buying this weekend could be the latest sign of how Chinese investors are moving money between asset classes quickly in search of high returns.Goings-on in China have driven bitcoin volatility in the past, and it stands to reason that this is what's going on again.Meanwhile, comments on Reddit and Twitter from those in the know not only point to a Chinese investor effect, but also raise the possibility that the effect won't last.This will occur if the bitcoin buying just turns out to be a way-station on the way to other assets:This.My concern is that big chunk of BTC buys is a short-term exit from CNY before dumping it for USD/GBP later./OL3UmuUSoZ- Oleg Andreev (@oleganza) May 30, 2016So is the current price surge a sign that virtual currency is catching on at last?Or is this just another example of bitcoin's famous volatility in which greedy outsiders rush in to get rich, only to get burned when the price collapses again weeks or months later?

We'll see soon enough.Share The price of bitcoin surged to over $1,171 on Thursday, a surge that puts it above the previous all-time high of $1,165.89 set Nov.The digital currency’s price has been above $1,000 for nearly two months — its longest ever streak north of that milestone — and Thursday’s surge means the price has risen 175 percent over the past year.Divining and predicting exactly what drives bitcoin’s price fluctuations involves so many variables that it leaves even professional experts making guesses.The last time it spiked this high was late 2013 immediately following the closure of Silk Road, the dark net black market that helped bring the cryptocurrency to mainstream news outlets.The price wobbled wildly then and cratered to as low as $209 soon after.It’s crept up ever since.Signs point to this spike being driven by much broader market forces.Although the currency has been widely adopted by cybercriminals and mischief-makers as their currency of choice, companies like WordPress, Microsoft and Subway accept it, and financial giants are reportedly closely examining the technology for their own use.

Reports from CoinDesk, a leading cryptocurrency news website, pointed to upcoming potential American political wins for bitcoin including a coming SEC decision on the Winklevoss twins’ ETF that may attract a range of new investors.Four years after the original filing, the SEC’s decision will be made public by March 11.You can follow the live price of bitcoin at CoinDesk’s price index chart.Does the price really matter?It’s exciting, it grabs headlines and it can mean an awful lot for short term movers.But Jerry Brito, the executive director of the cryptocurrency research institution Coin Center, focuses on the long term.From that perspectives, spikes and dives mean less.“The Googles and Facebooks of Bitcoin–the killer apps that will make the technology indispensable for ordinary users–may not come for another 5 years,” Brito said in 2015 following a price drop that year.Coin Center told CyberScoop that their perspective remains unchanged: They’re looking five to 10 years to the future, not to today’s price changes.