Bitcoin 4000, Why and How it Happened and What's Next?

What a day for Bitcoin.

24 hours past the cryptocurrency was trading under $3,700. About an hour ago it jumped passed $4,000 and had no signs of quitting. It's currently trading around $4,135.00. For reference, a week ago Bitcoin hit an all-time large as it passed $3,000 for the first time.

Have a look at the chart below to find out what the cost has done in the past 24 hours.

So the million dollar Bitcoin question is, why now?

Without wasting a lot of your Saturday night with detailed analysis, here are a couple of possible reasons you can inform friends and family during brunch tomorrow.

Two weeks ago Bitcoin went through a challenging fork and came out unscathed. Sure, a bitcoin-clone known as Bitcoin Cash was created, but it has gotten much less attention than many people anticipated. A couple of days after Bitcoin secured in SegWit, a code modification which fixes malleability difficulties and frees up space in blocks, allowing for more trades to be kept in each one.

These two code-related developments have helped boost conference in Bitcoin's future.

Another motive -- the ICO frenzy. The amount which recently increased due to the first coin offerings have now (at least temporally) topped amount raised via early stage venture capital. Only last week Filecoin increased $180 million in a couple of hours. Most of the investors usually require conversion of fiat money to Bitcoin or other cryptocurrencies to participate in ICOs, which might be driving up the cost (and supplying some traders using their first taste of Bitcoin).

Another motive -- Wall Street's new obsession is Bitcoin. You can not watch CNBC for five minutes without seeing a trader or analyst give their view -- which is usually something insanely bullish like "it is likely to be the best performing investment of the year." For better or for worse, statements like these are becoming non-technically likely investors interested in Bitcoin, some of which are buying coins for the first time.

So what happens next? Nobody knows. Bitcoin could crash 50 percent to $2,000 tomorrow or spike to $5,000 -- and I do not think anyone who knows crypto would be amazed at either option.

Everybody has a different opinion -- some say the bubble is oversize and should have surfaced months past -- others feel that Bitcoin is presently only a fraction of what it might eventually trade at.

Whichever camp you fall in, here is one friendly reminder: do not spend more than you can afford to lose -- because if you ask anybody who's spent more than a couple of months in the cryptocurrency world, they will tell you it is a roller coaster.


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