In the last week over 80% of Bitcoin Mining hash power has indicated full support for SegWit 2X. This overwhelming support now virtually guarantees a smooth transition to the new Bitcoin software framework, provided no unforeseen technical difficulties surface.
Computer experts in the Bitcoin Mining community are currently testing the software; they will be rolling out the update during July 2017, with completion scheduled by August 1, 2017.
SegWit 2X is designed to dramatically increase Bitcoin network processing capacity. In so doing it promises to reduce network congestion, which has inconveniently increased in recent months resulting from skyrocketing international acceptance of Bitcoin, increased usage of the virtual currency, and massive amounts of Bitcoin transactions that are being processed every day. As a result, valuation of Bitcoin has enjoyed unprecedented valuation highs over the last 60 days.
With change comes opportunity…
As with all change, the last two weeks have signaled a downward trend in Bitcoin valuation, in anticipation of SegWit 2X transition. Uncertain of how smoothly transition will occur, the investor market will not be convinced of its success until after SegWit 2X transition has been fully implemented.
In May 2017 Bitcoin reached an all-time high exceeding $3,000 per Bitcoin. At that time there was no indication that SegWit 2X would come to fruition. Since then there is overwhelming consensus that SegWit 2X is the appropriate path to take at this time, and its transition is due to be complete by August 1, 2017.
Billionaire and pre-eminent Venture Capitalist Tim Draper has predicted Bitcoin valuation to reach $10,000 per Bitcoin in 2018. Mr. Draper is well-invested in Bitcoin and he has not retracted his prediction.
Many countries such as Australia, China, Japan, South Korea, Mexico, Norway, and now India have embraced Bitcoin as legitimate currencies for financial transactions in their respective countries, parallel to their government’s fiat currencies.
In the United States the IRS has ruled that Bitcoin is an appropriate asset class for Tax-Deferred Savings Accounts (IRAs). They have also classified Bitcoin and other Virtual Currencies as property. This is a welcome decision by the IRS for investors because it means Bitcoin is treated as a capital gain/loss for tax purposes, instead of earned or ordinary income.
A smooth transition to SegWit 2X resulting in solving the congestion processing issues that have proven problematic on the Bitcoin platform in recent months is music to an investor’s ears. Smooth sailing is on the horizon once this implementation is complete as we see countries and major financial institutions fully embracing this innovative technology, known as Bitcoin.
Will You Capitalize on the SegWit 2X Dip?
Valuation of Bitcoin will likely continue to slide downward (perhaps even precipitously) over the next several weeks as anxious investors pull out of the market. In contrast, savvy investors will likely capitalize on this dip and find themselves in profit on the other side of SegWit 2X by the end of September.
The best time to buy is always when the market is down. July and perhaps early August will be optimum times for those that have risk capital to invest in Bitcoin while valuation is low.
The “smart money” believes SegWit 2X transition will occur smoothly. If industry experts such as Tim Draper are correct, we might see $3,000 per Bitcoin again by September 2017.
Zaydee Rule
Partner, Bitcoin Investment News
Partner, BitcoinIRAusa.com