Bitcoin Surged to a New High Adding $17 Billion in Just Over a Week
Defying naysayers, Bitcoin’s price surged above $4,500 for the first time early Thursday to reach a market value of $73.6 billion.
While the cryptocurrency has since pared some of its gains, falling to $4,453 by midday Thursday, it’s risen by about $1,000 in the past nine days. The currency’s total market value jumped $17 billion in the same period, thanks in part to the optimism traders have around plans to help Bitcoin eventually go mainstream. This includes speedier transactions, starting with its software update—dubbed Segwit2x—earlier this month.
“We can also speculate that it is related to the increased interest from Korean and Japanese exchanges where volumes are also increasing,” William Mougayar, the founder of Startup Management, told Fortune. “Another part of it is driven by the psychology of markets, as $USD 5,000 seems to be within reach, now that the $4,000 level has been easily broken.”
That said, Bitcoin’s sudden rise is cause for concern for some.
Goldman Sachs analyst Sheba Jafari wrote in a Sunday note that she expected Bitcoin to potentially hit and peak at $4,827.
“The market should in theory enter a corrective phase. This can last at least one third of the time it took to complete the preceding advance and retrace at least 38.2% of the entire move,” she wrote. “From current levels, that would measure out to around $2,221.”
Meanwhile, plans to scale up Bitcoin haven’t exactly gone smoothly. Miners still appear split about how to implement SegWit2x. The first part of that plan was activated earlier this month, but the second part, an upgrade to Bitcoin’s software by increasing block size to two megabytes in November, has been a point of contention. That upgrade, which was made official this week, will result in a “hard fork.”
Miners already dissatisfied with Segwit2x decided not to make that upgrade earlier this year, forming a new cryptocurrency offshoot dubbed Bitcoin Cash. If more miners shun the November upgrade, it would in theory result in yet another Bitcoin currency.
Bitcoin Cash is trading at about $373.80, 47% off its all-time high earlier this month. Ethereum, on the other hand, is trading at about $289, 26% off its all-time high earlier this year.