Bitcoin Price Explodes to $3,212 New All-Time High, Factors
On August 5, less than four days after the Bitcoin Cash (BCH) hard fork, Bitcoin price surged drastically within a 24-hour period, recording a new all-time high at $3,212.
Previously, Bitcoin price broke the $3,000 mark mostly due to optimism surrounding the activation of the Bitcoin Core development team’s transaction malleability fix and scaling solution Segregated Witness (SegWit).
However, shortly after that, a major market correction led Bitcoin price to fall to $1,900, and it stabilized at around $2,500 amidst uncertainty regarding SegWit and the execution of the BCH hard fork, which was initially proposed by Bitcoin mining equipment manufacturer Bitmain.
As Cointelegraph previously reported, various SegWit experts including Blockstack co-founder Ryan Shea have described Bitcoin as a “Swiss Army Knife” of a solution, because of the wide of range of Bitcoin’s existing problems it solves.
Most notably, SegWit is expected to scale the Bitcoin Blockchain by 75 percent while eliminating transaction malleability, which has recently become a major security issue for BCH.
Bitcoin Core developer Peter Todd emphasized the necessity of SegWit on the Bitcoin network following the announcement of ViaBTC on Aug. 5.
As various experts and developers including Paxos principal architect Jimmy Song have noted earlier this week, Bitcoin price is likely rising due to the imminence of SegWit activation. Since the mining community has already agreed to activate SegWit via Bitcoin Improvement Proposal BIP 91 and 141, the original SegWit proposal, SegWit is likely to be activated on the Bitcoin network by Aug. 14.
As the abovementioned date approaches, Bitcoin is expected to continuously increase in value, establishing new all-time highs.
Why is SegWit pushing Bitcoin price up?
The debate between the mining community and Bitcoin developers regarding the activation of SegWit has delayed scaling in Bitcoin for years. The first attempt to scale the network which was presented at the Hong Kong roundtable consensus event failed and it took over a full year since then for the Bitcoin industry, mining community and developers to come to a consensus to activate SegWit.
More importantly, the activation of SegWit marks the first major milestone in Bitcoin in terms of scaling, as Bitcoin has continuously operated within the 1 MB block size limit established by Bitcoin creator Satoshi Nakamoto upon its launch in 2009.
SegWit will also establish the infrastructure necessary for two-layer solutions such as Lightning Network to operate. The implementation of Lightning Network and other solutions including TumbleBit will further scale the Bitcoin network by enabling micropayments and applications that were not possible before.
Another driving factor of Bitcoin price is rising demand from institutional investors. This week, CBOE, the largest options exchange in the US announced that it will integrate Bitcoin futures contracts and options on its trading platform by partnering with regulated Bitcoin exchange Gemini.
In opposition to the prediction and analysis of researchers including Vinny Lingham, who has been relatively accurate with his Bitcoin price trend predictions in the past, Bitcoin price is maintaining its upward trend despite the recent execution of BCH.