Financial Institutions in the world reportedly have started to include Bitcoin. However, the major products being launched, at the moment, are investment and trading related. While this adds credibility and security to the asset, it makes it a speculative asset nonetheless.
Moreover, gold has limited use, but people all around the world still value its lustrous property. Bitcoin is an efficient store of value, but its transaction capabilities restrict it.
The average fees of each transaction on Bitcoin is again on the rise as the number of transactions is increasing. Marc Bevand, a Twitter user, published his discovery on of the transaction fees problem that has crept us again. He tweeted,
“Bitcoin hit 19 BTC in pending tx fees. It’s an 11-month high, since Jun 20, 2018. Translation: mempool is filling up, tx fees going Average tx fee over the last 6 hours is 3-4 USD. “
Vinny Lingham, the trade analyst and Founder of Civikey, also expressed his apprehensions about the transaction capability and inflation in Bitcoin that might restrict the growth in price. He tweeted:
The only major concerns I still have right now are : 1) fee stability/inflation impacting the network, 2) if Satoshi’s coins ever moved
The reward for mining Bitcoin is currently higher than the spending rate or the growth rate of the entire network. Hence, there is considerable inflation, even at $8000 price levels. Nevertheless, with the lightning network in development and Bitcoin halving next year, the current transactions inabilities of Bitcoin will have improved a lot. However, at the current economic levels, it looks like a FOMO buy.
Peter Brandt questioned the market sentiments and the scale of the increase in price recently. While he predicted a parabolic move in bitcoin as well, but it was supposed to be spread out over time, creating higher highs and higher lows. He expressed it through a rhetoric poll in which he asked,
…has there has been enough FOMO by BTC bulls who missed the bottom that a sizable correction can now occur.
The ‘short squeeze on Bitcoin‘ and the associated FOMO from Bitcoin bears are the two good plausible explanations for the extreme surge in price. Another trade and chart analyst pointed out to the peculiarity of the parabolic curve that Bitcoin recorded in terms of price.
Will Bitcoin touch $10,000 before sizable correction? Please share your views with us.
Nivesh from Engineering Background is a full-time Crypto Journalist at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com