The price of bitcoin saw something it hasn’t seen much of lately today – a 24-hour decline to the tune of triple digits.
According to figures from the CoinDesk Bitcoin Price Index, the day-over-day decline marks a rare occurrence over the last month. Over that span, bitcoin has been largely in the green, spurred by a diversity of factors on which analysts haven’t found much to agree.
The pause in price growth may be stunning, if only for the fact bitcoin has been consistently setting new all-time highs in recent trading sessions.
Analyst and trader Jacob Eliosoff, for instance, downplayed bitcoin’s off-day, positioning it in perspective of bitcoin’s overall gains. The price of one bitcoin is up over $700 so far this year, and up nearly $1,300 since May of last year, BPI data shows.
Still, Elisoff pointed to data that suggests bitcoin’s historic corrections have been swift.
He told CoinDesk:
“A natural question is, when the correction does come, how far will it drop? I don’t know, but in the past they’ve been huge.”
Others projected that the price may simply be consolidating after a period of intense growth, with over-the-counter trader Charlie Shrem reporting that he believes this to be the case.
Shrem pointed to bitcoin’s long-term value projections as evidence the market isn’t “satisfied” even with the current price observed today.
Scaling worries
And as the momentum subsides, some worry that bitcoin’s past problems may now become more visible. For example, with litecoin having recently upgraded its code to scale its transaction capacity, it’s possible bitcoin’s scaling debate could soon again heat up.
“I think bitcoin will be worth $5,000 or $10,000 in a few years time, but it can’t get there unless we get past this scaling debate, and short-term price rallies only serve to delay us dealing with this reality,” said angel investor and entrepreneur Vinny Lingham.
Lingham went on to note that price spikes of any severity are also more likely to make bitcoin’s limited throughput apparent. “The rewards per block keep going up,” he remarked.
Data from Bitnodes now suggests it costs about 240 satoshis to clear 1 byte of transactions on the network, meaning average transaction fees are now above $1.
Charles Hayer, CEO of digital currency data website CryptoCompare, agreed with Lingham.
“In terms of capacity bitcoin is straining at the seams, whilst litecoin is streets ahead in terms of forward thinking and governance,” he said.
While still conjecture, the comments point to potentially troubled waters ahead – or big gains if an upgrade can finally be made.
Charles Bovaird contributed reporting.
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