Hooray to Bitcoin! The golden standard of the crypto money has set yet another mind-blowing record – $8,000! This year the golden boy of the crypto world has gone up by more than 700%.
This has been a great year for Bitcoin investors as the BTC to USD price has increased so much, but is this merely a pump mode or are there other reasons for this drastic increase? We explore the possibilities so that investors knew how to safeguard their valuable cryptos best.
What is going on?
Software upgrades have a way of inflating a price. This year Bitcoin upgraded its system once in late August (SegWit) and was supposed to go for a second upgrade on November 16-17 (SegWit2x), which was cancelled. Over the weekend, however, rumors spread like wildfire that SegWit2x might go ahead after all. A statement was apparently published on the blog of one of the world’s largest Bitcoin exchanges. You may remember that due to SegWit, Bitcoin holders were rewarded with Bitcoin Cash, the forked version of Bitcoin. With the activation of SegWit2x, Bitcoin holders were expecting to be rewarded with free cryptocurrency, aka B2X. After the initial announcement that SegWit2x had been cancelled, the price of Bitcoin was corrected and went to $5,555 but only to jump a further 40% over the weekend. This was a 29% increase from its previous all-time high.
An analyst from the Cryptocompare site, Charles Hayter was quoted saying that the word ‘fork’ translates to a fat increase in the price of a particular cryptocurrency as people hope to receive the free cash.
The impact of the cancellation of SegWit2x on November 8 was that Bitcoin dropped $38 million of its market cap. The explanation is simple – with the hopes of free cash now going fart into the past, investors dumped Bitcoin to invest in alternative coins. There is an unwritten rule in the crypto world that if the price of Bitcoin increases, the price of altcoins will decrease and vice versa. Having pumped the price of Bitcoin to a new record high, these so-called pump-and-dumpers dumped Bitcoin to invest into altcoins that were for an incredibly low price at that stage. Only Bitcoin Cash was an altcoin that stood its ground and proved quite profitable during the SegWit2x debacle. The price of Bitcoin Cash nearly doubled during this time.
These rapid movements in the cryptocurrency world rocked the whole community and couldn’t have been neglected by the opinion leaders. Spencer Bogart, Blockchain Capital’s head of research, told Moneyweb that the pump may have been driven “by a resurgence in interest and viability for the SegWit2x hard fork.” He also believes that investors are rotating capital from altcoins to Bitcoin to ensure they get their hands on the free money. That way, they will still have the financial gains of altcoins and, at the same time, get Bitcoin’s newly arisen coin.
Recap Bitcoin fork
Due to the ever-growing demand for Bitcoin, it became evident over the years that Bitcoin’s blockchain was starting to fall behind when it came to transaction speed and costs. New altcoins were emerging daily, bringing new prospects of ‘lightning’ fast transaction speed and cheaper transaction rates. Bitcoin was quickly starting to fall behind and something had to be done. Hence, the crypto community came together and it was decided to try the SegWit proposal with the hope that the block size could increase from 1MB to 2MB. Bitcoin Cash, on the other hand, was created to take some of the workload off of Bitcoin’s shoulders. Bitcoin Cash itself has larger blocks and meets the requirements of being faster and cheaper. It is interesting to compare Bitcoin to Visa for example. Bitcoin can perform about seven transactions per second, whilst Visa can handle 2 000 transactions. The idea behind Bitcoin Cash was to be implemented for transactional purposes on a commercial level.
How likely is Bitcoin to surge again this year?
Will Bitcoin holders be having themselves a merry little Christmas this year or was this the wrap-up? Answering that question is a task for the institutional investors who wait to put their money into the Bitcoin market. Now, there are numerous projects under development aimed specifically at retailers and institutions that want to trade with Bitcoin. The big boys in investing can put millions into these projects. Brian Armstrong was quoted saying that there are literally $10 billion already waiting to be invested into the crypto market. Should this brilliant plan work out, Bitcoin’s market value could increase to more than $200 billion very soon. This is but one example of major companies looking to invest in the crypto market. There are tons more!
Currently, Bitcoin’s daily trading volume is about $5.8 billion whilst Apple, for example, has a trading volume of less than $4 billion. Besides an increase in Bitcoin investors, there has also been a drastic increase in the number of retailers and platforms that trade Bitcoin. Square, a leading payments app that is worth $15 billion, recently welcomed Bitcoin. All this being said, by December 2017, Bitcoin’s value could have grown even further.
Time to Buy Bitcoin?
It is important to know who you can trust in this volatile and unstable market, and those who put their trust in CEX.io are reaping the rewards while we speak. CEX.io is a leading and reliable brand and excels in providing professional around-the-clock service to clients. The platform helps over 1 million of users every day to buy and sell Bitcoin. As a customer, you will enjoy strong security, world coverage, cross-platform trading and competitive commission.
Buying Bitcoin on CEX.io is very easy! All you have to do is open an account, deposit money in your preferred currency, and you are well on your way. Currently, the price of one Bitcoin in US dollar is $8,254. Besides, you can use your credit card or make a bank transfer, whichever works best for you.