The price of Bitcoin has surged to over $400 for the first time since November 2014, but what exactly is behind the surge?

There are multiple possibilities, perhaps with all of them operating together, but the simple answer is that no one knows for sure exactly why after a year in the relative doldrums the price continues to head north.

Here are a few of the theories about what some are already dubbing the beginning of the second Bitcoin bubble.

Winklevoss theory

The Winklevoss twins launched their Gemini Bitcoin exchange in October with a promise that a transparent and secure exchange would attract new institutional investors into the Bitcoin marketplace.

As it turns out that promise was true, with a report Monday from CNBC saying that from 31 trades on its first day, it managed to complete over 2,000 during last Friday’s session and has completed 11,176 trades in the last three weeks.

Gemini is still a bit player in the space by volume, but the halo effect the publicity around the launch of the exchange may have also driven increased business to older, more established Bitcoin exchanges as well.

China syndrome

The recent implementation of new capital controls imposed in China may be spurring nationals there to use Bitcoin as a way to evade the controls The Wall Street Journal claims.

While the theory is denied by some, there’s no question that something is going on in China with trading on BTC China, the biggest Bitcoin exchange globally surging to exchanging 80,000 Bitcoin a day lately, up from a more recent average of 20,000.

The alternative theory for China is the country may be in the grip of a massive Bitcoin-based Ponzi scheme called MMM; Bitcoin Magazine quotes a spokesperson from another Chinese Bitcoin exchange called Huobi as saying “We believe that most of the investors hold a positive attitude towards the future development of Bitcoin industry. However, money is neutral. Capital flow is the reflection of the market movement. We can’t deny that MMM to a certain extent pushed the recent spike of bitcoin price. The new investment model of MMM attracted a lot of investors, however it is unsustainable.”

US Marshals

Another theory points to the impending auction by US Marshals of Bitcoin seized from Silk Road during the raids last year.

Business Insider quotes Michael Sonnenshein of Grayscale Investments as saying that “as bitcoin auctions run by the US Marshals draw closer (only in a handful of instances), the cryptocurrency tends to see increased trading activity.”

European Union court decision

The decision late November by the European Union Court of Justice to exempt Bitcoin from the imposition of a value-added tax (VAT) on the grounds that Bitcoin is a proper currency per EU law on taxation of “currency, banknotes and coins used as legal tender” may have sparked extra interest and investment across the 28 nation group

Scarcity

As aforementioned, it’s likely the price of Bitcoin may be influenced in part by all these theories, but there’s one thing for sure everyone can agree with: Bitcoin, unlike fiat currency that can be printed at whim, is a finite commodity that suffers from the basic economic theory of scarcity at times of increased demand.

The price elasticity of that demand is clearly affecting the price sensitivity of Bitcoin as it stands today and although we shouldn’t expect Bitcoin to surge back over $1,000 anytime soon, give current demand it’s not a long bet to predict that we could see Bitcoin heading towards the $600-$700 mark by Christmas.

Image credit: Coinbase