The last few days have seen bitcoin prices vary massively, as large trading volumes have driven the market on a bit of a wild ride.
24 hour trading volumes reached an all-time high of over $26 billion over the weekend. This is a significant increase in a market that recently was seeing typical trading volumes of $10 billion. The amount of transactions being carried out suggests that interest in the cryptocurrency continues to grow.
As for the price, bitcoin soared to a stunning record high of $7,721 ($5,890) last week before slumping as low as $5,617 (£4,284) over the weekend. It then recovered to $6,620 (£5,049).
While the original bitcoin was dropping, bitcoin cash went in the opposite direction and reached its own record high several times in the last week. From $800 (£610) it surged up as high as $1,856 (£1,415), giving it a market value of $30 billion and briefly pushing it past ether as the second most valuable digital currency.
The data seems to suggest that many people are now making the switch from bitcoin to bitcoin cash. Indeed, a number of analysts have pointed to the failure to reach agreement on the Segwit2x upgrade as a possible turning point in the cryptocurrency world.
A notable feature of this apparent switch was that the mining power used on bitcoin cash was higher than that on bitcoin for the first time ever on Sunday. This has been summed up by some industry insiders as being down to supporters of the Segwit2x fork switching their allegiance to bitcoin cash.
Is Bitcoin Getting Too Slow and Expensive?
One of the fears about bitcoin is that it may eventually become too slow and expensive to use, while the newer and slicker bitcoin cash offers a powerful alternative. Of course, the speed and cost of transactions were issues that the rejected Segwit2x upgrade were meant to fix.
Bitcoin was originally planned with security as a higher priority than speed of transactions. However, the large number of transactions being carried out now means that there is a big backlog of transactions waiting to go through. Some people say that the currency can’t progress until this issue is sorted out.
On the other hand, other analysts suggest that the bitcoin cash price rise won’t be sustained in the long term. Indeed, some people believe that this is simply the result of a concerted push by certain bitcoin cash firms to drive up the price of the currency. Perhaps bitcoin will re-assert itself shortly and bitcoin cash will lose the impulse that has seen its value shoot up.
Naturally, financial industry insiders and investors are keenly awaiting to see what happens in the global cryptocurrency markets now. Will the key bitcoin developers manage to push through a new upgrade that solves the current problems of efficiency and cost? Will bitcoin cash overtake the original bitcoin eventually and become the number one digital currency?
What seems clear is that we can expect a further period of volatility before it becomes clearer what the future holds for bitcoin.