Subsequent to achieving a new all-time high at $4,975 merely two days ago, Bitcoin price has decreased to around $4,350.
Many analysts including Welt financial desk senior editor Holger Zschaepitz attributed the decline in Bitcoin price to China’s recent crackdown on initial coin offerings (ICOs).
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SegWit working its magic yet?
Over the past week, prominent financial analysts such as RT’s Max Keiser predicted Bitcoin price to increase at an exponential rate in consideration of the successful integration of the Bitcoin Core development team’s transaction malleability and scaling solution Segregated Witness (SegWit).
Through SegWit, the Bitcoin network has already shown tremendous progress in terms of scaling, reducing its average block size to 0.8 MB and its mempool size from over 140 mln to 10 mln bytes.
Bitcoin users utilizing SegWit-enabled wallets such as Trezor and Ledger are expected to enjoy substantially lower fees, with an average reduction rate of around 35 percent.
Andreas Antonopoulos, widely recognized Bitcoin and security expert, noted that a $0.34 fee was sufficient to send a transaction to an employee and include it in the first block.
That means, with SegWit, Antonopoulos and many other users can send transactions that are confirmed within minutes with a fee less than $0.5.
On Sept. 1, Keiser changed his interim price target from $5,000 to $10,000, as Bitcoin’s momentum indicators demonstrated sustainable upward trend for the mid-term.
More to that, in terms of development, especially the adoption of SegWit and the introduction of Lightning Network-based applications, there were many reasons for analysts to be extremely optimistic about Bitcoin.
Here comes China
Still, in the mid-term, Bitcoin will likely outperform other cryptocurrencies, fiat currencies and assets drastically.
If it successfully recovers its recent minor correction caused by PBoC and the Chinese government’s crackdown on ICOs, it could lead yet another strong rally and break past the $5,000 mark.
As Keiser explained, $5,000 and even $10,000 is in sight due to the tremendous amount of development and activity surrounding the Bitcoin network.
More to that, Brian Kelly of CNBC, Keiser, and Litecoin creator Charlie Lee have emphasized the importance of Bitcoin to conventional investors and the traditional finance sector as safe haven assets.
With tension amongst North Korea, the US, South Korea, Japan and China increasing rapidly, the demand for Bitcoin will likely skyrocket in the upcoming weeks.
Additionally, Jihan Wu, Bitmain co-founder, who holds significant influence over the Chinese mining industry, noted that Bitcoin is still legal in China and its legality has not and will not be changed due to the government’s investigation into the local ICO market.