Tuur Demeester, a prominent bitcoin investor, analyst, and editor in chief at Adamant Research, believes the bitcoin price would surpass the $5,000 mark if support towards SegWit2x declines in the next few days.
China May Resume Cryptocurrency Trading But What About SegWit2x?
Since early September, the bitcoin price has struggled to recover beyond $4,500 due to uncertainty surrounding the Chinese cryptocurrency exchange market and SegWit2x. Analysts have started to demonstrate optimism towards the possibility of the Chinese government resuming cryptocurrency trading because of the latest report of Xinhua, a state-owned news publication in China.
As local Chinese cryptocurrency news source CnLedger revealed:
“Xinhua News, the official press agency of China: Virtual currencies have become the top choices of underground economies. We shall adopt “zero-tolerance policies” towards crimes hidden underneath and take measures such as record-keeping, licensing, AML processes, real-name, limiting large transactions.”
While it is becoming more evident that the Chinese government will resume cryptocurrency trading in the future, it is still too early to predict when the government would impose a national licensing program for cryptocurrency exchanges, as reported by Xinhua.
But, uncertainty around SegWit2x is continuing to hold back the momentum of bitcoin and its short-term rally. Several business have pulled out from the SegWit2x NYA agreement and the plan of the Digital Currency Group-led consortium of companies to carry out a hard fork in November. Demeester noted that if support towards SegWit2x declines in the next few days and weeks, the bitcoin price target of $5,000 would be realistic and likely.
“The charts need to confirm, but if the Bitcoin 2X hard fork turns out to be a nothingburger, it could provide tailwinds for a rally and $5,000,” explained Demeester.
Why SegWit2x is Different From Bitcoin Cash and Ethereum Classic Forks
Earlier this week, Charlie Lee, the creator of Litecoin and former executive at Coinbase, the $1.6 billion Bitcoin wallet and trading platform, noted that SegWit2x, the proposal to increase the bitcoin block size by 2MB, is fundamentally different to Bitcoin Cash and Ethereum Classic because as of current, it has majority support from miners.
Thus, it will be a rare instance in which the SegWit2x hard fork will be carried out as an “upgrade” to the bitcoin protocol but will lead to a separate blockchain network instead because both blockchain networks (bitcoin and SegWit2x) have the possibility to evolve as majority chains after the fork. It is likely that exchanges such as Coinbase will adopt the BTC and Bitcoin moniker for the original bitcoin blockchain but that could also change in the future if–even though it is not likely-SegWit2x evolves into the majority chain.
“Because this 2x hardfork is so contentious, Coinbase cannot handle it the same way they handled the ETC and BCH hardfork. In other words, they can’t just choose one fork and ignore the other fork. Choosing to support only one fork (whichever that is) would cause a lot of confusion for users and open them up to lawsuits. So Coinbase is forced to support both forks at the time of the hardfork and need to let the market decide which is the real Bitcoin. Now the question is which fork will retain the ‘BTC’ and ‘Bitcoin’ moniker and which will be listed as something separate. Although Coinbase signed the NYA agreement, I do not believe that this agreement binds them in any way with respect to how to name the separate forks.”
The mid-term performance of the bitcoin price relies on the SegWit2x hard fork. Already, positive indicators of growth are being demonstrated primarily due to the rapid adoption of bitcoin by Japan and South Korea, and the possibility of the Chinese government resuming cryptocurrency trading in the upcoming months.
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Last modified: June 11, 2020 10:06 AM UTC