Bitcoin has gone from $5500 to $6500 in a week. This is an enormous spike for an already highly priced commodity. The value of Bitcoin seems to be growing continually. With no signs of stopping, there has been substantial speculation as to what the upper limit of Bitcoin’s value will be. Indeed, there are even predictions that Bitcoin’s price will reach $100,000 within 10 years. This speculation in and of itself is a major force in driving up the price of Bitcoin. The more people buy-in as a result of hopes for a meteoric rise, the more the value will increase. However this speculation based increase in value leads to dangerous situation where any loss of confidence in Bitcoin can lead to a massive crash.
Bitcoin, and crypto-currency in general, is highly vulnerable to government regulation. If global economic policy shifts against crypto-currency, bans on Bitcoin would lead to an utterly catastrophic decrease in value. Even ruling out outright banning crypto-currency, if economic policy on the governmental level turns against it many people will jump ship, driving the price down. So far, the government has not significantly reacted to crypto-currency. As crypto-currency begins to become more prevalent and cause macro level effects on world economies, it is likely that there will be at least some negative reactions that will reduce the value of Bitcoin.
However until governments decide to take action against Bitcoin, it is likely to continue to increase in value.