Actually, everything looked very rosy for the Bitcoin price. Despite the SEC’s rejection of the Winklevoss brothers‘ Bitcoin ETF a week ago, the Bitcoin price recovered steadily. The price quickly jumped back above the $1250 mark and it seemed that the Bitcoin price could not be affected.
But then the attention began to shift from the Bitcoin ETF to the scaling debate and the associated problems in the Bitcoin network. As we already reported yesterday, there is a lot of tension in the community as there is a hard fork in the room to finally counteract the overload of the network. Transaction costs have risen massively and the processing time has increased massively – the network is literally crying out for a solution in the scaling debate.
Nevertheless, the pressure on the Bitcoin development teams is great
Understandably, such turning points bring with them a great deal of uncertainty. If the proponents of a hard fork prevail, this would have an enormous impact on the future of the Bitcoin network. Exactly this escalation of the conflict, we can see in the significant collapse of the Bitcoin price:
In the last 24 hours, the Bitcoin rate has slumped by over 15%. A descent that we did not even experience during the riots in China a few weeks ago, when the Chinese central bank’s actions unsettled the Bitcoin market and the Bitcoin stock exchanges.
Their decisions will influence the Bitcoin share price
Accordingly, it is to be hoped that the disputing parties, Bitcoin Core and Bitcoin Unlimited, will show a willingness to compromise in order not to further unsettle the market. Their decisions will influence the Bitcoin share price, at least in the short to medium term, more than anything else that can be ignored at the present value.
Looking back into the past, it was precisely the solved problems that led to Bitcoin’s strengthening. It is precisely in such crises that the strength of an asset or a currency becomes apparent. Consequently, it is to be expected that after a solution, no matter what it looks like, there will be more clarity again, which in turn will lead to more trust and confidence in the network.
In retrospect, we can speak of luck that the Bitcoin ETF was rejected. If this had been approved, it would have led to an enormous hype and inflow of funds into the Bitcoin network. However, the network is already at its limit when it comes to processing transactions. The short-term price rally that would probably have been triggered might have brought the Bitcoin network to its limits for good. In the end, overtaxing the Bitcoin network would have caused more damage than the increase in popularity and capital.