Bitcoin hits new record
INCREASED CLARITY OVER ITS FUTURE
The cryptocurrency hit an all-time high of just over $4 225 on Sunday, as the bull run played out across global bitcoin exchanges. In SA, the bitcoin price shot up from a high of R51 681 early Friday morning to a new record high of R62 843 on Sunday. Data from SA exchange Luno shows 2 241.826 bitcoin were traded via its platform between Friday and Sunday, which at a mid-point of R57 262 is equivalent to over R128 million. Bitcoin hit a new record high of R68 449 early yesterday morning, retreating to R59 615 by 3.45pm. It was at R15 149 on December 29.
RMB blockchain lead Farzam Ehsani said the rise is related to increased clarity over the future of bitcoin after a recent fork. Bitcoin’s said to have “split” on August 1 as Bitcoin Cash, a new cryptocurrency independent of bitcoin, was launched following a dispute among developers on how to scale bitcoin. Simultaneously, Bitcoin Core adopted SegWit – an update at solve transaction malleability and increase transaction speed and throughput on the blockchain.
“There was a lot of disunity in the bitcoin community leading up to the fork. Given the decentralised nature of blockchains and the difficulty in making protocol upgrades, many people divested from bitcoin not knowing how the fork would pan out. But the fork went relatively smoothly and there is now more clarity on how bitcoin and Bitcoin Cash (the forked blockchain) plan to scale. This clarity has drawn people back into the cryptocurrency and, as there’s a limited supply of bitcoin, the price is going up,” he said.
There’s also speculation that bitcoin, like gold, is acting as a safe-haven asset as geopolitical tension between the US and North Korea escalates. Ehsani said it’s possible people are trying to hedge against this risk using bitcoin, which he believes shares many of gold’s characteristics, but performs better as a financial instrument in some key respects. Like gold, bitcoin’s supply is restricted, but it’s more portable and divisible, cheaper to store, supranational and can’t be controlled by any individual, institution or government, he said.
According to Lorien Gamaroff, Bankymoon CEO, Bitcoin’s going through a “next step” moment, similar to when the internet became mainstream. “People outside the system are looking at it seriously and trying to figure out how it works and there’s all this new money coming into the system.
“Mainstream pundits are making predictions and mainstream institutional investors are looking at it. It has got over that early stage when people thought it was all about drug dealers and money launderers.”
Bitcoin’s fast gaining traction in SA. CryptoCompare data puts the market cap of SA bitcoin holdings at just over R1 billion, versus a total global market cap of $70 billion.
Luno wouldn’t disclose the number of active users on its domestic platform, but confirmed a marked increase in interest.