Bitcoin, the most famous cryptocurrency in the world, is not showing any signs of slow down. It just recently surmounted peak 4K USD sometime ago. Let that just settle in… 4000 USD for a single Bitcoin!
An hour before Bitcoin touched 4000 USD, it was trading at 3700 USD. At the time this article was written, Bitcoin was trading at 4074 USD after touching a high of 4135 USD.
If this doesn’t tingle those brain cells of yours, leading you to question the meteoric rise of Bitcoin, the information that just a week earlier Bitcoin had passed the 3000 USD mark for the first time surely will.
To put it into perspective, Bitcoin theoretically has given a 25% return in just a week, with its increase in market price to 4000 USD.
The whole cryptocurrency market is valued at 126 billion USD, and with its current trading price, Bitcoin has the biggest slice of this pie with its standalone market capitalization of 68.16 billion USD.
Bitcoin and Bitcoin Cash
Everyone now wants a seat in this train as it shows no signs of stopping, moving ahead at full speed. The billion dollar question now to ask oneself is what steroid has Bitcoin injected itself with recently that it’s breaking all these previous records.
The tipping point can be traced back to two weeks ago when Bitcoin successfully adopted the new SegWit protocol. 95 percent of all the miners acknowledged that the way forward was the adoption of the SegWit protocol and did so within the designated timeline of two weeks.
Sometime around then, a Bitcoin doppelganger named Bitcoin Cash was also created and released into the market, but it failed to garner enough traction.
The SegWit code update which fixes the malleability issues and also frees up the required space in the 2016 blocks, so that they can store a higher number of transactions.
The factors leading to market changes
These two developments in the cryptocurrency space are what have been fuelling its latest charge in the markets.
Another event which also can be credited with this new interest that Bitcoin is garnering is that of ICO – Initial Coin Offerings. Of late, the amounts raised in an ICO are surpassing the amounts raised by average early stage venture capital.
FileCoin, just last week, raised 180 million USD in a matter of just a few hours! The requirement of converting fiat currency into cryptocurrency to participate in these ICOs could also be very well driving the price up.
Wall Street has been very bullish with cryptocurrency, especially Bitcoin. Analysts are also of the opinion that Bitcoin is where one needs to park one’s money to get the best possible returns.
This is leading to the financially less mature also putting in their hard earned money into it.
Food for Thought
The bottom-line is that no one knows where the top line or bottom of Bitcoin lies; it can move up to 5000 USD levels or also fall down 50% to 2000 USD.
What we do need to keep in mind is that we should not invest more than what we think we can afford to lose just in case things don’t go in our favor.