ReutersNov 17, 2017 21:38:51 IST
Bitcoin hit an all-time high just below $8,000 on 17 November, on talk that a software upgrade whose suspension sent the cryptocurrency into a tailspin at the end of last week was, after all, going ahead within hours.
Talk that the upgrade — which could split or “fork” bitcoin into two versions — would go ahead was driven by a statement on the website of Coinbase, the world’s largest bitcoin company with operations in 32 countries.
“The Bitcoin Segwit2x fork is expected to occur in the next six hours,” it said in a statement published at 1004 GMT. If a bitcoin clone were created, any holders would also in theory instantly become owners of the new spin-off.
Bitcoin, generally highly volatile, has been on a particularly wild ride, sliding at the end of last week to as low as $5,555 after plans for Segwit2x were suspended, before bouncing more than 40 percent since 10 November.
It reached as high as $7,997 in early Asian trading on the Luxembourg-based Bitstamp exchange, before easing back a touch to trade broadly flat by 1115 GMT at $7,863.
Market-watchers said speculation about the fork was driving bitcoin higher. If it went ahead as expected, holders of the cryptocurrency would be able to sell the spin-off at a profit if the market were to assign it any value.
But in a post on the Medium blogging platform, the company’s communications director David Farmer said Coinbase did not expect the fork to successfully split bitcoin in two, as it lacked the necessary support from the network to do so.
“Whenever people hear ‘fork’ nowadays the price jumps, as people hope to get the free dividend,” said Charles Hayter, founder of cryptocurrency data analysis site Cryptocompare.
“There is also a resulting spike in demand for people entering bitcoin” from other cryptocurrencies.
Farmer said the company was actively monitoring the situation and that all funds stored in Coinbase wallets remained safe. All bitcoin buying and selling would be suspended on Coinbase in the hour prior to the fork, which is expected between 1400 and 1600 GMT. Bitcoin is on track for its best week since July. For the year, it is up more than 700 percent.