The price of Bitcoin has shot to one month highs today. Topping out at around $4,878, the price surge in the world’s most popular cryptocurrency has likely been driven by the proposed Bitcoin Gold (BTG) fork.
During August, a similar event took place in which Bitcoin Cash split from the main BTC chain. When such a hard fork occurs, everyone holding coins on the original chain, receives an equal number of both Bitcoin, and whatever other asset is created in the process. It’s likely that the current surge in buying is driven by investors hoping to maximise their Bitcoin position before any fork takes place. This will mean they’ll also receive the greatest possible number of Bitcoin Gold. The hope is that there will be enough support for the BTG chain and that exchanges will eventually offer markets in which to trade it and of course profit.
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The price rise will be welcome relief to investors who had an uneasy month in September. Chinese regulators started the month by banning all ICOs which hurt the market. Later, domestic exchanges ceased operations supposedly following a request from Beijing. In addition, major financial players like Jamie Dimon of JP Morgan Chase and Bridgewater Associates founder Ray Dalio may have discouraged some potential investors with their comments on crypto. It is, of course, impossible to quantify the effects of such instances on the market. However, with both occurring within days of each other, one factor or the other, but likely both combined, created the perfect shit-storm for traders.
Whilst today’s sudden surge is likely attributed to the BTG fork, other positive news is helping investors shake the uncertainty of last month. Japan, for example, recently gave the green light to eleven Bitcoin exchanges and in the process became the planet’s largest crypto market. Elsewhere, Goldman Sachs have been mulling over the possibility of a trading platform focused on digital currencies.
CNBC report that founder of Gatecoin, Aurélien Menant told them about the strong base that’s been building since the uncertainty sparked by China. This will have surely underpinned the sudden increase in price occurring thanks to the BTG fork.
Bitcoin’s rally is continuing off the back of a more certain regulatory environment across the world, most notably in Japan. This has encouraged more institutional funds to enter the market and we are finally seeing the effect of this additional liquidity.
Menant also warns of uncertainty in the short to near term but is bullish for the end of year Bitcoin price. He predicts that as 2017 closes, we could see the digital asset valued at around the $6,000 mark.