Bitcoin’s 2017 Rise
Bitcoin, the most popular and original cryptocurrency has risen dramatically in 2017, from $700 to $8100 per Bitcoin. A large part of this is due to a rise in legitimacy. For example, on October 31st, the CME Group, a financial institution announced the launch of Bitcoin futures. A future is a type of contract that an investor (such as CME Group) puts out that bets on the price of a commodity at a certain time. They are essentially a way of making money by speculating that the commodity (in this case, Bitcoin) will increase.
Announcements such as these bring legitimacy to Bitcoin as a currency which causes a spike in value. In contrast, news such as China banning ICOs and cracking down on bitcoin miners de-legitimizes the cryptocurrency, leading to a price drop. This is in line with the diffusion-threshold rule. As more people ‘believe’ in a currency, the price increases. The opposite is also true. Big announcements like these provide information to the masses about the currency and can have a cascading effect on networks of people in whether they want to invest in Bitcoin. This is a big part of the reason why even today, the price of Bitcoin is incredibly volatile.
http://www.cmegroup.com/media-room/press-releases/2017/10/31/cme_group_announceslaunchofbitcoinfutures.html