The price of Bitcoin went below the $4,000 line yesterday, quickly crashing and reaching a 12-day low of $3660 at around 5:00 AM UTC. While it is unclear what caused the dip, it may be related to the upcoming SegWit activation. The nature of the update may make some investors wary, prompting them to “wait out” the update and return once technical stability is ensured.
Whatever caused it, the crash didn’t last long, as Bitcoin started to recover immediately after reaching its 12-day low and is now sitting at $4110. Having risen 12.50% today, Bitcoin’s trading volume is also higher than usual with $555.19 M exchanged in the USD/BTC markets in the last 24h. As usual, Japan is leading the markets in trading volume with a 45% market share.
SegWit coming soon
While it is still unclear if the upcoming soft fork caused the BTC flash crash, the quick recovery may also have something to do with the long-awaited SegWit activation which is scheduled to take place one day from now. The SegWit update will allow the Bitcoin network to handle more transactions, a prospect that can restore Bitcoin’s characteristics as a quick and cheap payment method. In theory, SegWit can double Bitcoin’s transaction throughput.
The activation of SegWit was an uphill battle. However, the SegWit2X agreement managed to bring industry leaders together, winning over more than 80% of the network hash rate. Although the Segregated Witness (SegWit) update will be activated tomorrow, the SegWit2X agreement also aims to increase the transaction capacity by means of a hard fork in November, increasing the 1mb block size limit to a 2mb one.
Some members of the developer community have voiced their concerns and complaints regarding the technical dangers and lack of planning that has been put into the SegWit2X agreement, claiming that it’s a rushed upgrade and that an hard fork should be better planned.
Future looks bright for Bitcoin
The price of Bitcoin has grown 250% in the last 6 months, breaking previous all-time highs and gaining popularity all over the world. The future looks bright for Bitcoin, as even well-known skeptics like Mark Cuban are beginning to invest in the space.