Bitcoin price reaches new highs of $900

The price of Bitcoin vs the US Dollar has now reached $900. These are heights that have not been reached since the 2014 pump. Unlike a simple rapid pump however, the price has been trending this way for some time, since just before the block halving of 2016 until the present day. It hovered round $650 to $700 for a while afterwards but is now on the rise again.

There are many factors which contribute to a rise in Bitcoin prices. The first was the block halving; once many miners had sold off reserves the amount of coins entering the open market will have significantly reduced. Coupling this with increased adoption, more retailers like steam games accepting Bitcoin, and Bitwage in India beginning to gain traction, this has contributed towards the price increase. There is also the situation of rising network difficulty making coins even harder to mine.

There is however a risk that unless the community comes to a consensus on deploying a block size increase, the network could stall due to increasing popularity due to blocks that are too small. This could easily undo major price increases if potential users decide to abandon the currency. Segregated Witness is a soft fork fix to this by the core developers and allows the network to infinitely scale from there. This is better than a hard fork by far and it carries much less risk.

The last time the price of a single Bitcoin approached these heights was 2014, and it was a mere pump as the price rise was very sudden and intense. The price then crashed afterwards, due to it being a simple pump as the mainstream media had shown interest in Bitcoin. This increase has been more gradual and it looks like the prices will stay reasonably high for the time being.

The Bitcoin Core developers have been working well on a scaling solution and Segregated Witness allows the use of payment channels such as the Lightning network. Solving the scaling problem now would help seal Bitcoin as a mainstream currency and a store of value and would further cement these prices. With 8 plus billion people in the world and 21 million coins, the more adoption increases the higher prices will get, simple supply and demand economics.

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