On Thursday, Bitcoin prices took flight across the all-important $5,000 level.
It is a landmark moment for the currency, made all the sweeter because it comes on the heels of Russia’s anti-Bitcoin posturing.
The Bitcoin to USD (NYSEARCA:UUP) exchange rate lifted off around 7:50 am (UTC). It soared 8.5% to reach $5,222.70.
As suggested by our previous Bitcoin price forecast, BTC only required one strong trading session to top the $5,000 level. Once the price crossed that threshold, it continued to skyrocket, thus breaking new ground for the famous cryptocurrency.
Daily Bitcoin Chart:
Several factors are driving the rally. One of them (arguably the most important) is the SegWit2X hard fork. It is prominently featured in Bitcoin news and is even making its way up to mainstream media outlets.
The conflict is tangled and messy. Some investors believe that SegWit2X is a necessary upgrade for the Bitcoin blockchain. Others disagree. Rather than split their differences, they are forking the blockchain into two: Bitcoin Classic and Bitcoin2X.
However, even investors who support the soon-to-be forked currency must initially invest in Bitcoin. How else will they get their coins?
This means that Bitcoin prices are in luck—the hard fork is a powerful short-term tailwind for higher prices.
We wrote yesterday that bearish remarks from Russian President Vladimir Putin might threaten to freeze these gains. Not only did he warn about the dangers of cryptocurrencies, but a senior official at the central bank called ICOs a “pyramid scheme.”
These comments were aggressive enough to warrant attention, but it appears that the market is choosing to ignore them for the moment. The SegWit2X hard fork is sucking up all the attention.
Whenever Bitcoin prices advance more than 10%, we expect a lull of some kind. Either price growth will falter or turn negative. But before long, the underlying fundamentals kick in again. Remember this when the hard fork tailwind peters out. Our Bitcoin price prediction is built on much more than just SegWit2X.