Bitcoin hit another record last night, crossing the US$8,000 line for the first time.
What’s Going On with Bitcoin Price?
Back at the start of November, bitcoin had reached another milestone. For the first time, it was trading at over US$7,000. Talk that the cryptocurrency would be splitting in two through a Segwit2x hard fork drove the rise in value.
In case you haven’t heard, there is a division in the bitcoin community. For quite some time now, the community has not been able to decide how to speed up the software that runs bitcoin.
On one side sit the miners, who want to double the size of the bitcoin blocks from 1MB (megabyte) to 2MB to reduce transaction times. On the other side are the developers, who want to maintain the core fundamentals of bitcoin as they are.
On 10 November, the crypto plummeted from US$7,000 to about US$5,800 after the community announced it was cancelling the fork.
You see, if the bitcoin fork took place, anyone holding bitcoin would also be getting the same amount in the new coin. Think of it as a dividend of sorts.
That’s why everyone flocked into the currency when they announced the fork…and then traded out when they found out the fork wasn’t happening.
Bitcoin has had some amazing gains this year. Just to give you an idea, in the last month it has gone up by over 36%; since January, it has gained over 700%…
However, the thing with bitcoin is that it is incredibly volatile. It is still a very small market, so every dollar invested can create large price swings.
Yet every time the price has plummeted, bitcoin has come back stronger to reach new heights. Since the cancellation of the fork, bitcoin has come back again to hit the current US$8,000 mark.
You see, forks are not the only things driving bitcoin prices higher.
Bitcoin’s Attracting More Investors
Bitcoin’s incredible gains are attracting more investors, which is pushing demand. This has sparked the interest of Wall Street. If institutional money starts entering this space, it could drive the crypto to even greater heights.
Recently, CME Group, a futures exchange, announced that they will be releasing a CME Bitcoin Futures contract by the end of the year.
And First Trust is also planning to release a Blockchain Exchange Traded Fund (ETF).
If you are not familiar with blockchain, it is the technology behind bitcoin. The blockchain is essentially a shared public ledger — a database that every member of the network can see and contribute to.
The use of blockchain has the potential to transform many industries — from banking, to cyber security, to accounting…you name it.
That’s why it looks like bitcoin is here to stay…
Is bitcoin a bubble in danger of bursting? Or is it the opportunity of a lifetime?
If you are keen investing in bitcoin, don’t spend a cent until you have read this report.
For Money Morning