With the Bitcoin Core development team’s transaction malleability fix and scaling solution Segregated Witness (SegWit) lock-in achieved, the market and investors are expressing their confidence in Bitcoin and its ability to scale.
The certainty and imminence of SegWit activation has definitely acted as a driving factor in sustaining the upward momentum of Bitcon’s value.
Scaling debate on Bitcoin and its block size has been prolonged since 2015 and the activation of SegWit marks a significant milestone in Bitcoin and the first major step towards scaling.
But it is also inaccurate to attribute the surge in Bitcoin price solely to the activation of SegWit.
Throughout 2017, mainstream adoption of Bitcoin by general consumers, traders, institutional investors, large-scale conglomerates and merchants significantly increased.
Such rapid increase in adoption demonstrated the acceptance of Bitcoin as a widely-recognized digital currency, in addition to being a safe haven asset and digital gold to long-term investors.
Three Reasons Why Bitcoin Will Rise Towards $5k
Bitcoin price will likely increase at a consistent rate in the upcoming months mainly due to three driving factors:
- Adoption by institutional investors,
- Elimination of uncertainty in Bitcoin’s scaling issues and
- Increased legalization of Bitcoin in major economies.
Bitcoin and the entire cryptocurrency market’s daily trading volume has surpassed $5.5 bln, with Bitcoin and Ethereum accounting for nearly $3 bln of the cryptocurrency market’s daily trading volume.
Through highly regulated exchanges including Gemini’s daily Bitcoin auction and the Chicago Board Options Exchange (CBOE)’s Bitcoin integration, institutional investors will be able to trade and invest in Bitcoin with higher liquidity.
Already, some of the largest investment firms in the world including Fidelity Investments, which oversees over $2.13 tln in assets, have announced that they have invested in Bitcoin and Ethereum.
Fidelity CEO Abigail Johnson stated:
We have built proofs of concepts that accept Bitcoin micro-transactions. We set up small Bitcoin and Ethereum mining operations, just done in the spirit of learning. But I am still a believer – and it’s no accident that I’m one of the few standing before you today from a large financial services firm that hasn’t given up on digital currencies.
Perhaps more importantly, uncertainty around a hard fork execution and Bitcoin’s scalability have been eliminated with the recent Aug. 1 hard fork of Bitcoin Cash (BCH).
For years, the Bitcoin community and industry have expressed their concerns over potential security issues of a hard fork but in actuality, the BCH hard fork had minimal impact on the Bitcoin network and the value of Bitcoin and demands towards the digital currency have never been higher.