The combined market cap of all digital currencies has returned above $90 billion, rising by some $30 billion in the past four days from a recent low of around $60 billion.
The price move is led by the two biggest digital currencies, bitcoin and ethereum, which have seemingly turned bullish in the past few days.
Ethereum, despite a hack of some $30 million, appears to have quickly recovered today after its price jump two days ago following the news MasterCard, Cisco and other giants had joined the Enterprise Ethereum Alliance.
Ethereum’s price action today might be more due to bitcoin which jumped a few hours ago to a recent high of $2,630, up by $300 from around £2,300.
Bitcoiners have seemingly turned very bullish because they are anticipating the imminent locking-in of segwit which now has more than 80% of the mining hashrate with the rest expected to join soon.
As such, segwit may activate during early August if the next 55 blocks out of 72 vote for it, which appears likely as the recent bitcoin blocks have been by segwit miners.
The market has reacted positively as bitcoin finally reaches a decision after more than two years of scalability debate. Sending bitcoin’s price up and with it most of the other digital currencies which have turned green today.
Some are up 10%, some even more, while nearly all of them are green with the exception of a red here and there. Like ETC, which is probably still recovering from yesterday.
It remains to be seen whether this recent bullishness indicates a trend reversal after a very red July and mostly bearish June, or whether it’s a brief respite before the bear market continues.
But Goldman Sachs seems to think bitcoin will re-test its all-time high and may go as high as $3,700, potentially dragging other digital currencies up with it.
As far as fundamentals are concerned, they may be right as bitcoin’s capacity will now double from the current 300,000 transactions a day to around 600,000. So its fees should return to a lower level, at least in the short term, and its confirmation times should return to normal.
Thereafter, there are plans to increase its capacity further by compressing transaction data and by adding second layer protocols, so sentiment might turn, but we’ll have to wait and see.