May 27, 2016- In This Issue:

 

  
Why the Bitcoin Price Is Surging in Spite of the "Obits" 
The Bitcoin price is up 12% in the month of April and has more than doubled over the past 12 months.

As of midday today (Tuesday), the CoinDesk Bitcoin Price Index was hovering around $467. As recently as January, the price of Bitcoin was as low as $358.77. And one year ago today, the Bitcoin price was $218.82, putting its 12-month gain at 113%.

That's pretty impressive for an asset that has been declared dead 53 times since the beginning of 2015, with 14 of those "obits" coming since the beginning of this year (according to 99Bitcoins.com).

price of bitcoinContrast the jump in the price of Bitcoin with just about any other investment over the past 12 months; it's not even close.

Stocks? The Standard & Poor's 500 Index is up a paltry 1.35%. Bonds? Interest rates remain at historic lows. The Dow Jones Commodity Index is down more than 18%. Gold? Up 3%.

Of course, many investors still don't trust Bitcoin. It hasn't stood the test of time like gold, and for most of its existence has been very volatile.

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We looked inside a secret Chinese bitcoin miner
On the edge of a tiny Chinese town is a strange building where you can get an insight into the future - and only a handful of people know what is happening inside.
I am on my way to visit one of the biggest bitcoin mines in the world: where up to $8m in digital currency is generated per year by solving complicated mathematical algorithms with computers.
The location is secret and I have been invited under the strict condition that I live onsite with the miners. The owners don't want to broadcast their specific location, because while the Chinese government is neither officially pro or against bitcoin, the huge amount of money flowing from these mines is outside state control.

The town itself is so high up in the mountains that you have to bring your own cans of oxygen. Mobile phone signals frequently disappear around the mountains and valleys that surround the township. But high speed wi-fi makes video calls and chat apps the main mode of communication.

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New Bitcoin Price Prediction by Needham Puts Value at $655
Seeing growing use over the next several years, a new Needham & Co. Bitcoin price prediction estimates the digital currency's present value at $655.

That's not far from the present value of $604 that fellow investment firm Wedbush Securities came up with in a similar Bitcoin price prediction analysis last fall.

bitcoin price predictionBoth are substantially higher (45% and 57%) than the Bitcoin price today of about $417.

Notoriously volatile, the Bitcoin price rocketed 8,500% in 2013, then fell 87%. And in the past year, the price of Bitcoin is up 67%.

But the digital currency refuses to go away.

That two respected Wall Street firms are devoting resources to Bitcoin price analysis speaks to how far the cryptocurrency has come in just a few short years. Once derided as a tool for criminals and anarchists, Bitcoin is now taken very seriously by the financial community.

That's because the world's big banks and financial institutions realize that Bitcoin and the technology that underpins it, the blockchain, have the potential to completely disrupt their businesses. And so more and more, they've chosen to study and embrace it.

The Needham Bitcoin price prediction, released this week, actually was undertaken to initiate the firm's coverage of the Bitcoin Investment Trust (OTCMKTS: GBTC). That was also the purpose for last November's Wedbush Bitcoin price prediction.

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Is Bitcoin Becoming More Stable Than Gold?
Digital gold is starting to look slightly more stable than its physical counterpart.

Since its inception several years ago, bitcoin has seen wild prices swings as advocates have tried to establish the nascent technology as a widely-used digital currency. But for the past three weeks, the price volatility of bitcoin has remained below or equal to that of safe-haven gold, according to data analysis from FactSet and CoinDesk.

The last 24 days mark the longest period in which bitcoin prices have been less volatile than gold prices, going back to 2010. Some point to the drop as a sign that investor perception of bitcoin is drawing closer to gold as a safe store of value.

Gil Luria, a managing director at Wedbush Securities who covers e-commerce and payments, said that as bitcoin has gathered steam, it's taken on a similar role to gold. Holding bitcoin or gold can appeal to a coinciding demographic of investors, since both may be used as an alternative when investors lose faith in traditional asset classes.

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