Bitcoin Breaks $6,000 Barrier, Market Cap Now Exceeds $100 Billion
Following the spectacular break of the $5,000 barrier last week, many suspected that $6,000 would fall in due course. They were right.
Bitfinex, the highest volume BTC/USD exchange, broke the $6,000 barrier earlier today and has now been joined by all other major exchanges. At press time, the price of Bitcoin had reached $6,041 according to Coinmarketcap.com, causing its market capitalization to exceed $100 bln for the first time ever.
What’s news got to do with it?
The latest surge comes after a week of consolidation over the $5,000 mark, despite the comments of naysayers like Jamie Dimon and the president of Brazil’s central bank. In the last month, China banned ICOs and Bitcoin exchanges, South Korea banned ICOs, the US SEC stepped up scrutiny of ICOs, and the CEO of Chase Bank has been unable to keep his mouth shut.
None of it matters.
For years, Bitcoin has been called “the honey badger of money,” and “antifragile.” The “Bitcoin don’t care” meme is perhaps most applicable of all right now. Bitcoin simply doesn’t care what China does, or what bank CEOs say, or what central bankers think. The only thing Bitcoin cares about, apparently, is increasing in price and adoption.
Can’t hold it back
Many have speculated that institutional money is making its way into Bitcoin, and they are likely correct. LedgerX was recently approved by the Commodities Futures Trading Commission to create a regulated Bitcoin options market. Such a market would give institutions wary of holding the actual digital currency a way to expose themselves to its price movements. LedgerX is scheduled to debut Bitcoin options trading this month.
Bloomberg reports that industry executives expect approval of a Bitcoin ETF in the future. They point to LedgerX, saying that with a regulated derivatives market having been approved by the CFTC, it’s only a matter of time before the SEC gets on board and allows an ETF to be created. Earlier this year, SEC had themselves stated that in the event a regulated options market is developed, they may reconsider their position on Bitcoin ETFs.
The approval of an ETF, or exchange traded fund, is seen to be the holy grail of institutional Bitcoin adoption. Such a fund would be required to actually possess enough Bitcoin to be fully “backed,” and would be easy for institutional and retail investors to use.
Perhaps the most surprising aspect of Bitcoin’s latest price moves is the rapidly approaching SegWit2x hard fork. Though 85% of miners are still signalling their intention to go through with the fork, recent defections (such as F2Pool) and statements from exchanges like Bitfinex and Coinbase may have convinced investors that the hard fork will not actually happen.
When asked about SegWit2x, industry CEO Bharath Rao commented that the debate seems to be between miners and businesses on one side, and users and developers on the other. He suggested that whatever chain the miners and businesses ultimately support will likely end up being successful, though it’s hard to predict people’s actions and their ramifications.
Still, Rao believes that forks can actually be perceived as a good thing, because when a winner emerges from such a fork, the marketplace will assume the controversy is ended and will boost the price of the victor.
If Bitcoin’s scaling crisis is finally resolved this November, through the victory of either chain or by means of a last minute fizzling of the hard fork threat, the market will likely continue to act favorably.