Bitcoin Surges as Divided Developer Factions Near a Truce
Bitcoin surged more than 15 percent on Thursday to its highest level in four weeks after digital currency developers indicated they’ve neared an agreement that would avoid splitting the cryptocurrency in two, as CNBC reports.
The two factions of digital currency developers have been split on the issue of scaling the coin between those who want bitcoin to be more of a commodity, like gold, with a limited supply that can accrue value; and those who want bitcoin to be a currency that can be used quickly in transactions like the dollar. Bitcoin miners must agree on a coding upgrade called BIP 91 by August 1 that would introduce the “Segregated Witness system.”
“Bitcoin is rallying largely because the probability of Segregated Witness being activated is increasing as more miners signal that they will activate it,” said Ari Paul, CIO of BlockTower Capital, a cryptocurrency investment firm. Not every miner has to agree, but at least 80 percent need to.
The move higher also came amid increased interest in the digital currency world from Wall Street. Forbes reported Tuesday that bitcoin is a top holding of investor Bill Miller’s hedge fund.
“The institutional interest in this space has picked up again, not that it really died off too much,” said Brian Kelly, a CNBC contributor and founder of BKCM, which runs a digital asset management strategy for clients. “Institutions are looking to get back in in a meaningful way.”
Bitcoin rose “to $2,675.67, its highest level since June 25, according to CoinDesk,” CNBC reports. Bitcoin fell by 27 percent in the span of one week last month after a major selloff by investors.
Ethereum also surged 18 percent on Thursday to around $230, according to CNBC.
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