While bitcoin prices are predicted to soar up to $6,000 per BTC by the end of the year, experts have cautioned users to expect extreme volatility.
Forecasts have suggested that popular cryptocurrency, Bitcoin, could possibly rise by up to 40%, with one BTC reaching the value of $6,000 before the end of 2017. However, financial experts have warned investors that despite this, bitcoin could be subject to extreme volatility in the upcoming months. Bitcoin traded at $4,333 per BTC this past Tuesday.
The third quarter of the year has been the most eventful period in the history of Bitcoin. Its value increased 74% since the start of the fourth quarter. The value rose significantly despite the huge shift in both developments and regulations that the cryptocurrency community has undergone these past few months.
Here’s a quick breakdown as to the recent changes in the cryptocurrency world, and what experts think will happen next.
Bitcoin fork
Bitcoin recently experienced an unprecedented record-high of transaction times which led to a congested network. The cryptocurrency needed to find a solution that would enable the currency to process the increasing amounts of data more efficiently. However, the community could not agree on a unanimous solution.
The strife amongst the Bitcoin community led to a fork which split Bitcoin in two. Bitcoin remained, while a new currency called Bitcoin Cash was created. Members still part of Bitcoin used a network upgrade, called SegWit2X, which would speed up transactions even further.
Bitcoin has a much higher market cap than Bitcoin Cash. Bitcoin Cash started trading at the beginning of August and has since risen to $900 per token. However, a recent drop in value which makes the current value of Bitcoin Cash around $402.
Japan takes the reigns
Until recently, China was considered to be the capital of Bitcoin activity. In addition, China was a prominent driver as to what influenced bitcoin prices. However, Chinese officials recently launched a severe crackdown on cryptocurrency practices, particularly initial coin offerings (ICOs).
The crackdown made a severe impact on all cryptocurrencies worldwide. Chinese bitcoin exchange platforms such as OKCoin, Huobi, and BTCChina stopped trading for all users in China. This led to a huge lack of investment from a financially dominant country. Whereas the Chinese yuan previously accounted for 17% of the global bitcoin trade, it currently only accounts for 3%.
Despite China’s crackdown, Japan has expressed a willingness to become more involved with cryptocurrencies. Japanese regulators have recently legalized bitcoin, and many large retailers have started to accept cryptocurrencies as a viable payment method. Last week, the Japanese Financial Services Agency (FSA), officially stated that it recognized 11 companies as registered cryptocurrency exchange platforms. Moreover, Japanese banks are currently investigating the viability of issuing their own cryptocurrency, called the J-Coin.
Record highs
Bitcoin reached an unprecedented high of $5,013.91 during the third quarter of 2017. The increased regulatory support in many markets, as well as the increased interest in cryptocurrencies from governments and financial institutions, are likely the underlying cause for the record high.
Is $6,000 BTC a possibility?
According to Thomas Glucksman, head of APAC business development at Gatecoin, many financial experts have been predicting that the price of bitcoin will possibly reach $6,000 towards the end of 2017. This prediction is slowly becoming a reality as it aligns with the current market sentiment.
However, Glucksman cautioned investors to brace for extreme volatility this coming November. It is predicted that many Bitcoin community members may reject the latest SegWit2X upgrade, causing another fork. Another split in Bitcoin is likely to damage its market value.