Bitcoin prices (BTC/USD) were down at the start of Friday trading, but were poised for a dramatic weekly rise amid easing concern over the future of the digital currency.
The cryptocurrency was down 5% to $2,729.58 at 5:42 BST, according to Bitstamp. It had approached $2,900 on Thursday as the market clawed back toward record highs.
At its highest point, bitcoin was on track for a weekly gain of more than 21%. Based on latest price levels, the BTC/USD is up around 17% compared to last Friday.
BTC/USD: A Sudden Reversal
The sudden uptrend was triggered by news that the majority of the blockchain community had agreed to support a new scaling measure that would beef up bitcoin’s transaction capacity. By agreeing to implement SegWit, market participants avoid a hard fork in the digital payment system.
Although the SegWit plan quickly won favor when it was first introduced back in May, some mining quarters said they would refuse to accept the new protocol.
Bitcoin’s Alarming Gains
Bitcoin’s price collapse earlier this month was the natural progression of a seemingly alarming uptrend. At its highest point back in June, the digital payment system had returned nearly 200% year-to-date. This wasn’t some penny stock, but a digital currency that had gained 125% the previous calendar year.
When it comes to volatility, bitcoin isn’t out of the woods yet. However, it’s clear from the latest rally that institutional interest is returning (although there are signs it never really left). Although the market’s bubble-like characteristics are difficult to argue against, the uptrend reflects more than mere speculation, but a growing belief that we are in the early stages of a decentralized global payment system.
One of bitcoin’s strongest value drivers is the fact that it isn’t correlated with other assets, which means its prices have nothing to do with how other assets perform.
Broader Crypto Market Returns to Health
Bitcoin’s broad reversal triggered a sharp rally across the crypto-sphere. At press time, the market is collectively valued at around $90 billion. That’s roughly $27 billion higher than last weekend.
Ethereum’s value was back above $220.00. Litecoin is up more than 10% through the early morning trade.