Many believe that Bitcoin price will hit a new high at 2016. My opinion is that this will happen at 2017 but this remains to be seen. The following three reasons are what many, including me, believe that will push the Bitcoin price up.
Every approximately four years the reward that Bitcoin miners get is cut in half. This means that the generation of Bitcoins will be reduced in half which lowers the supply. This doesn’t affect the volume of Bitcoins in wallets, only the generation of new ones. Demand is growing since the Bitcoin transaction volume is increasing. Based on the market supply and demand, Bitcoin should increase in value. This will not happen in a day or two but gradually and there was already an increase in the price. Sudden changes lead to increased volatility and price corrections.
Bitcoin had issues recently with transactions taking long times to be confirmed. This caused a debate between the Bitcoin developers and community. Bitcoin protocol will be updated and improved. Benefits include malleability fixes, improved security, lighter calculations, thinner clients, faster transaction processing and more. The changes will make Bitcoin even more stable which will increase the confidence and attract new Bitcoin users, both investors and merchants. As a result, demand will grow and price will increase.
Unstable Traditional Markets
Unstable traditional markets is one of the main reasons that pushes the Bitcoin price up. When investors pull their money from traditional markets because they loose faith, they turn into safe heaven assets. Traditionally this is gold but lately they consider also Bitcoin. When this happens, there is a spike in Bitcoin price since the demand and the buying volume is much bigger than the selling volume. There are several countries and currencies facing difficulties and they turn into Bitcoin. The vote results of BRExit recently resulted Bitcoin price to increase about 7%. If a fraction of the 300 billions end up to Bitcoin, we will have an even higher increase.