Bitcoin’s price surpassed the US$3,440 mark on August 8, sustaining its upward momentum established by the imminent activation of the Bitcoin Core development team’s scaling solution and transaction malleability fix Segregated Witness (SegWit).
SegWit, a solution which experts including Blockstack co-founder Ryan Shea had previously described as a Swiss Army Knife of a solution due to the wide range of problems it solves upon activation, is set to be integrated into bitcoin’s codebase in the coming days. Upon the activation of SegWit, bitcoin blocks and transactions are expected to be optimized by 75 percent, and bitcoin blocks in general significantly decreased in size.
Perhaps more importantly, SegWit tightens the security of hardware bitcoin wallets such as Trezor as well as the bitcoin network in general by eliminating transaction malleability, which has become a major security issue for Bitcoin Cash (BCH), the newly forked cryptocurrency of the original bitcoin network.
The vast majority of analysts have attributed the recent rally of bitcoin to the imminence of SegWit and the market’s high anticipation of its activation. However, according to mainstream media analysts including Max Keiser at RT and Brian Kelly at CNBC, bitcoin’s rally has just begun as there are many more driving factors that will affect the price of bitcoin.
On CNBC’s Fast Money, Kelly explained that there are three major factors driving bitcoin’s recent momentum apart from SegWit:
- An increase in demand and adoption from institutional investors
- The completion of the BCH fork
- No uncertainty regarding bitcoin’s short-term future
Kelly emphasized that the market, investors and traders all have gained significant confidence in bitcoin and its ability to scale, as the BCH fork had minimal impact on the bitcoin network. With the activation of SegWit now in sight, bitcoin holds little uncertainty in the short term.
The increase in demand for bitcoin from institutional investors has also been key, as casual investors and traders have gained confidence from the optimism of investment firms like Fidelity, which manages trillions of U.S. dollars in assets. Moreover, some of the largest financial markets in the world, including the Chicago Board Options Exchange (CBOE), the largest options exchange in the U.S., have also announced the integration of bitcoin.
Earlier this week, CBOE entered into a strategic partnership with Gemini, the fourth largest bitcoin exchange in the U.S., to offer institutional investors and large-scale traders a method to invest in bitcoin.
Executive of the largest options exchange in U.S. tells CNBC, #bitcoin is here to stay.
Positive outlook on bitcoin and cryptocurrencies! pic.twitter.com/czYNuEljVZ
— Joseph Young (@iamjosephyoung) August 4, 2017
In consideration of the above-mentioned factors and developments in the bitcoin and finance industries, analysts remain certain that the bitcoin rally is just beginning. Max Keiser emphasized:
“Bitcoin set to cruise through $5,000. Government money printing monopolies are being replaced.”