Bitcoin Surges Past $4,000 on Speed Breakthrough

Bitcoin surges past $4,000 for the first time on growing optimism faster transaction times will hasten the spread of the cryptocurrency.

The largest digital tender jumped to a peak of $4,187 Monday, a gain of nearly 17 percent since Friday, after a plan to quicken trade execution by moving some data off the main network was activated last week. The solution — termed SegWit2x — had been so contentious that a new version of the asset called Bitcoin Cash was spun off earlier this month in opposition.

The split grew out of the tension between growing demand for the virtual currency and some of the design features that had fueled that popularity — the decentralized verification procedures that ensured against hacking and government oversight. While this month’s confrontation ended up as little more than a speed bump in bitcoin’s more than 300 percent rally in 2017, concerns remain around the capacity to increase transaction volumes.

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“Up until now a lot of people didn’t really believe bitcoin could go any higher until the scaling issue is resolved,” said Arthur Hayes, Hong Kong-based founder of bitcoin exchange BitMEX. “With this actually being implemented on protocol, theoretically the amount of transactions that can be processed at a reasonable speed is going to be much higher, so a lot of people are very bullish about bitcoin now.”

Because of a cap on the amount of data processed by bitcoin’s blockchain, transactions started to slow as its popularity boomed. The community was then divided between the SegWit2x solution backed by a group of developers and another supported by miners that sought a larger increase in the block size. The latter then became Bitcoin Cash.

Bitcoin Cash, whose price has retreated since peaking right after its birth, has neither disrupted its progenitor’s operations nor undercut its appeal.

While SegWit2x has garnered enough support for activation, challenges remain. Its next stage involves doubling the block size to 2 megabytes some time in November, a possibility that’s still mired in debate. Reduced support could thwart this step, with some arguing that Bitcoin Cash — with a block size of 8 megabytes — has obviated the need for another “hard fork” to upgrade the bitcoin again, Hayes said.

The cryptocurrency’s staggering price surge has bolstered related businesses. Digital currency exchange Coinbase Inc. announced Thursday it’s received a $100 million investment. The supply of bitcoin is capped at 21 million, compared with 16.5 million that had been mined as of Saturday, according to blockchain.info.

“People are starting to price in the consumer demand from Coinbase’s $100 million fund-raising round,” said Justin Short, London-based founder of trading platform Nous. “That’s a lot of advertising budget. Every $1 million of marketing brings new demand, which increases the price as the supply is limited by design.”

Source – Bloomberg

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Vladimir Ribakov

Following 11+ years of trading experience, trading my own accounts as well as for hedge funds and brokerages, I have decided to fulfill my destiny and to personally mentor Forex and Commodities traders. When I released the “Broker Nightmare” (software that hides trades from brokers) 8 years ago, I found an overwhelming number of frustrated people who genuinely wanted to learn how to trade the Forex market, but instead found themselves scammed and misled. Over the years I have also release other trading systems based on my trading strategies, and met a lot of people on my worldwide Forex seminars. We’ve formed a close Forex community and we meet once or twice a year in various locations in Europe.

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View Comments

Mats says:

November 18, 2017 at 9:40 am

Aha, by "empty coins" you may mean USD, EUR, JPY and other "over-inflated" currencies backed up by huge debt? In that case I agree, since they're bound to devalue big time over time. But all the same I'm sceptical about Cryptos in the current form being totally deregulated.

Cheers, Mats
Mats says:

November 18, 2017 at 9:27 am

Thanks Vlad!

It is exciting that you disagree :-)

I'm of course no expert at all, it is more of a stomach feeling I have. I personally have absolutely nothing against Cryptos (I've tried to demo-trade bitcoin, which is exciting), I just don't think they will sustainable in the end if authorities decide to regulate them (which I strongly believe will happen). If they don't, it is double morale to me in comparison with prevailing tax prosecution, "the war against terrorism", the Panama Papers etc.. Moreover, which Crypto is to trust, they pop up as mushrooms out of the ground all the time? But the Crypto technology is here and will probably stay in some form (I like the underlying technology which wipes out all expensive intermediates).

Can you please explain what you mean by "empty coins" since I'm not familiar with this term. Being a conservative and rather long-term investor I still think that physical coins like gold and silver would be much more safe than a new, totally electronic-based technology which may fail for whatever reasons, technically or by authorities ("A bird in the hand is worth two in the bush").

Thanks again and cheers,

Mats
- Vladimir Ribakov says:
  
  November 19, 2017 at 9:59 pm
  
  Hi Mats
  
  By empty coins, I meant all the recent ICO and the AltCoins that have nothing behind them but hype...
Mats says:

November 17, 2017 at 7:16 pm

Dear Vlad and All

I'm very sceptical about crypto currencies. I suppose that I'm very old-fashioned and not an up to date guy (I totally missed this train). Not that I resent new technologies at all, but because of my age and experiences, I have it hard to believe that this will be sustainable and that you can just create so many millionaires out of the clear blue sky without any real and hard assets behind it, ok, with the exception of the new technology behind perhaps...

First of all most Western tax authorities are after every penny they can get out of us honest tax payers. As I've read, the cryptos allow a lot of black money to be exchanged unnoticed and that it is a haven for criminal activities. I don't think regulators or governments will accept this in the medium/long term and may close it all down (or will impose very harsh regulations).

Secondly, the Cryptos are far too volatile, it seems to me to be a big retail hype which may come crashing down on itself when very big market participants decide to kill the small retail traders any time they desire (big money, big forces). Forex is then much better because the market is so much bigger and not so easy to manipulate unless you have billions at hand.

But all this is just my humble position as an old and conservative guy. I might be totally wrong and have to adjust to new technologies. However, I think that the underlying technology of for example Bitcoin is much more worth than the crypto currency trading itself.

Thanks & best regards,

Mats
- Vladimir Ribakov says:
  
  November 17, 2017 at 9:48 pm
  
  I agree with you Mats and same time - disagree
  
  There are a lot of empty coins which will cause much more broken people than millionaires, but there are some, like BTC and others that might be the new era in the financial world