Bitcoin reached a new milestone yesterday as its market cap rose to an all time high of $102 billion, 20 times higher than it was just last year.
While its trading volumes have risen to $2.7 billion, near an all time high for the currency, which suddenly jumped yesterday by around $500 to reach a new high of $6,150.
However, the global market cap of all digital currencies remains unchanged at a near all time high of $174 billion.
While at the same time bitcoin’s market share has risen to almost 59%, a new recent high for the oldest and biggest digital currency.
In combination these facts suggest that much of the rise in bitcoin’s price is due to traders moving from other digital currencies to bitcoin, rather than because of new external adoption.
This is shown by the fact that most other digital currencies are down today, in a reversal of sorts. Including ethereum, the second biggest digital currency.
Eth used to track bitcoin up and down. Rising when it did, although more slowly, and falling when it did, although slightly faster.
Today, while bitcoin rises eth is down, back to its near $300 line it has kept for now months. The reason is probably because ethereans are sending their eth to bitcoin, and that’s probably because bitcoin is rising while eth is not.
Otherwise known as fear of missing out (fomo), there’s likely some panic buying going on as bitcoin asserts its dominance once again over the entire ecosystem.
That might be short lived and primarily due to the November hardfork which should hopefully settle the blocksize debate in bitcoin once and for all.
Many expect a chain-split, although whether there will be a major one remains unclear. There is Bitcoin Gold by Jack Liao, a vocal Bitcoin Core supporter, which intentionally intends to chain-split.
That makes it a minority coin, which will have a new Proof of Work algorithm, so in effect making the current bitcoin mining hardware obsolete.
It may act as a back-up for Blockstream if segwit2x does prevail, as it probably will if its mining support continues to remain at around 85%.
However, we have not really seen an upgrade of the 2x kind in the blockchain space ever. So little can be said with certainty at this stage.
Except that, perhaps, November should once and for all settle this debate, at least in its public form. That hopefully means Bitcoin Core can get on with their roadmap and we’ll see what they deliver. Likewise the other teams.
At which point science might re-assert its dominance over unruly emotions as the open source projects get on with the work at hand delivering, or indeed failing to deliver, on the promises of codable free market money.