Bitcoin is back in business after some bad publicity.
On September 5, the controversial cryptocurrency (digital currency) was trading below $4,000 after the Chinese central bank banned initial coin offerings (ICOs), which allow firms to raise money by selling new digital tokens to investors. Bitcoin then soared to $4,410 within 24 hours – a record 11.6-per-cent increase. Another cryptocurrency, Ether, had a similar dip and rise.
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Some factors in the swift recovery were a statement from the Hong Kong Securities and Futures Commission on the legality of ICOs, and an announcement on the upcoming launch of a new cryptocurrency.
Associate Professor J. P. Vergne explains the phenomenon in CryptoCoins News.
“We found that the best predictor of a cryptocurrency’s exchange rate is the amount of developer activity around it,” he says.
