Following a rollercoaster ride of a year for Bitcoin, it seems the excitement is not coming to an end yet. In less than a month, Bitcoin added more than $3000 USD to its price. This exceeds the expectations of both external actors and community members. Due to heavy criticism from high net-worth individuals in the traditional finance sector, the month of October had a rocky start as evidenced by traditional media coverage. Perhaps the most well-known slant came from JP Morgan CEO James Dimon, voicing his opinion on Bitcoin as ‘fraudulent’. Public slants aside, Bitcoin showed resilience as it continues its bullish run. Resilience in the face of negative coverage, sent Bitcoin soaring above $7000 USD and that has more actors in the traditional finance sector looking to invest, despite Jamie Dimon’s best efforts to sow doubt.
Bitcoin Futures Announced by CME Can Keep Bitcoin Soaring Above $7000 USD
Bitcoin is closer to mainstream “legitimacy”. The recent announcement from the Chicago Mercantile Exchange (CME) about its plans to enable Bitcoin futures trading, a decision which could attract an array of traditional investors to join the cryptocurrency bandwagon, can keep Bitcoin soaring above $7000 USD. If regulatory standards are met, Bitcoin could be endorsed by one of the world’s largest exchange operators. With a market capitalization of over $120 billion USD, such a step will encourage external investors to take that last step and plow billions more into the market.
Many wonder how this significant news will impact the price of Bitcoin in the immediate future considering the recent run. Nevertheless, until the markets get clear regulatory guidelines, investors shouldn’t bank on CME’s intentions to keep Bitcoin soaring above $7000 USD. In the meantime, bitcoin holders should instead turn their attention to endogenous forces, such as the upcoming SegWit2X fork.
Segwit2X: What is Going On?
Many have come to believe that a hard fork is an opportunity to get additional coins on an alternative chain, as a sort of “crypto-dividend”. That expectation has also buoyed bitcoin prices. Successful forks such as the Bitcoin Gold fork for instance, have contributed to Bitcoin prices soaring above $7000. Nevertheless, Segwit2X is different. This is possibly the most significant fork bitcoin has ever seen. Segwit2X seeks to double block size capacity from 1MB to 2MB, but this upgrade has the community split. This is the largest change to Bitcoin’s software yet, and its proponents are rolling it out without proper replay protection, which could generate transaction problems.
The fork is mainly relying on miners and business owners to support the decision. However, the nodes hold the ultimate trump card and most oppose the change. This could bring the Bitcoin network to a downward spiral in which economic actors use their power against each other. If that is the case, markets can expect to see a significant drop in Bitcoin prices.
How Will This Affect the Price?
In terms of overall influence, the CME’s announcement about Bitcoin futures is significant and might keep Bitcoin soaring above $7000, lest negative endogenous forces prevail. Nevertheless, it is impossible to attribute Bitcoin’s current bull run to any particular exogenous factor; the reasons why Bitcoin prices continue to rise are near impossible to identify outside the sphere of endogenous forces. As such, Segwit2X and the divide between the community will have the greatest impact on the current bullish run. Investors should look out for a serious market correction risk, depending on the endogenous infrastructural outcome of the SegWit2X fork.
For now, all community members are keeping a close eye on announcements on a regular basis, which in this instance is necessary. So far, many actors who were previously committed to SegWit2X, have expressed their desire to back away from that agreement, including miners. If the pendulum continues to swing in that direction, then SegWit2X might not happen at all. That outcome could well keep Bitcoin soaring above $7000 USD and beyond.