Bitcoin is out to prove that the scaling debate is a thing of the past.
The digital currency extended its gains to a new all-time high on Monday, when it reached an unprecedented $3,440 on Bitfinex. Bitcoin is currently trading at $3,415 with a market capitalization of $56.3 billion, according to Bitcoin.com data.
Experts point to increased investor confidence in the future of cryptocurrency as the reason behind the price jump. Ronnie Moas, founder of financial research firm Standpoint Research, told CNBC that investor confidence is “what supports the cryptocurrency right now.”
Previously, BlockTower Capital CIO Ari Paul chalked up bitcoin’s recent gains “to a brief rally” following a “relatively uneventful” split.
Paul was referring to last week’s blockchain fork event, which saw a group of miners split off from the main bitcoin blockchain, paving the way for a new cryptocurrency called Bitcoin Cash, which is currently trading at $329, according to CoinMarketCap.
The blockchain split is the culmination of the years-long scaling debate within the bitcoin community as they search for a way to increase the network’s capacity from the original 1MB.
Unlike SegWit2X, which will send transactions off-chain and increase the block size to 2MB, Bitcoin Cash will increase the block size to 8MB and remove SegWit. And because Bitcoin Cash starts with the same blockchain, this means that people who own coins on the main bitcoin blockchain are entitled to the same number of coins on the new Bitcoin Cash blockchain, effectively receiving a free dividend.
Fraudulent bank activities push customers towards bitcoin
As the future of bitcoin becomes secure, more customers are seen moving towards the digital currency and fintech.
Recent reports suggest that investors, traders, and even millennials, are losing trust in major banks and financial service providers due to their alleged fraudulent activities and inefficiencies.
Case in point is the Wells Fargo car loans scandal, in which the financial establishment is accused of defrauding 800,000 car loan customers. According to a Boing Boing report, Wells Fargo forced “274,000 of them into delinquency and ‘wrongfully repossessing’ (that is, stealing) 25,000 of their cars.”
Meanwhile, the European Union recently launched a probe into methods and measures that would prevent bank clients and users of withdrawing their funds in order to prevent banks from failing, Reuters reported.
These events could push majority of bank clients and consumers to embrace digital currency and other fintech applications, which will provide them with a better way—and secure—way of storing their funds.