Just some hours before SegWit Lock-in Bitcoin price has surged to the all-time highs! What drives the king of the top cryptocurrencies higher? What to expect after the SegWit activation?
8 August, AtoZForex – On Monday, Bitcoin prices have surged, surpassing the historic highs. The new Bitcoin Price Record emerged within a week from the cryptocurrency fork that we witnessed on the 1st of August. The Bitcoin Network split resulted in the creation of another cryptocurrency, Bitcoin Cash. Yesterday, we discussed the difference between Bitcoin Cash and Bitcoin.
Prior to SegWit Lock-in Bitcoin price surges above $3400
Yesterday, the Bitcoin price advanced 3.5%, hitting the high of $3,269.82, while its market cap stood at almost $55 billion. The prices of Bitcoin have already risen during the past week.
As of now, Bitcoin is changing hands at $3454.06, with the market cap at $56 billion.
Why is Bitcoin price rising?
Some of the market players believe that the current Pre-SegWit Lock-in Bitcoin price rally has a specific reason. This reason is the suspicious trading techniques used by at least one wealthy investor. The theory is that these investors aim to create the illusion that traders are willing to buy BTC at a high price. Thus, the value of the asset is rising and it potentially provides the bidder with an opportunity to cancel the trade and sell the asset at a higher price.
The currency that forked off the original Bitcoin, was trading up 52%. However, it is still accounting for 57% decline since its 2nd August peak at $727.
Markets are expecting Segregated Witness (SegWit), so – called BIP 141 to lock-in within the next hours. A previous version of the Bitcoin proposal, BIP 91, emerged as a vital step toward the implementation of SegWit. It has caused the Bitcoin network to automatically reject any blocks that do not signal BIP142 activation. The BIP 91 was activated on the 20th of July.
As soon as 95 percent of the blocks within a 2016 block difficulty adjustment period will signal for SegWit, it will be locked-in. After the lock-in, another 2016 block period will appear. Everyone needs to upgrade their software before SegWit activation.
BIP 91 has required all miners to signal for SegWIt or their blocks would appear rejected. Thus, the markets were already expecting the SegWit activation since 20 July.
However, as the change will lock-in, Bitcoin won’t upgrade immediately. There are two reasons for this:
- SegWit’s two-week “grace period”. Because of this, the change won’t “activate” until block 481,824. It is currently projected to happen on August 21.
- Even though lock-in ensures that SegWit will become a part of the Bitcoin network, the services still will need some time to upgrade their software.
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