Hot on the heels of a strong weekend, the Bitcoin price (BTC/USD) extended its gains on Monday, reaching its highest level since early September.
According to data from Coinmarketcap, the world’s largest cryptocurrency yesterday hit an intraday high of $4,878.71, before closing the session at $4,772. Bitcoin was last seen at these levels on September 2, before the news about China’s crackdown on initial coin offerings.
Meanwhile, most other major cryptocurrencies have suffered losses over the past 24 hours, which has allowed Bitcoin dominance to surpass 50% for the first time since May.
"There has been a rotation of money out of the lower-quality names and into bitcoin," Ronnie Moas, founder of Standpoint Research, said, as quoted by CNBC. He added that people were speculating that “bitcoin will rally following the upcoming fork as it did following the August 1 fork” into Bitcoin and Bitcoin Cash.
Nolan Bauerle, director of research at CoinDesk, told CNBC that “a positive key price indicator for bitcoin and has got traders bullish”. Bauerle also attributed Bitcoin’s gains to the growing adoption of the SegWit scaling upgrade.
A yesterday report by Cryptocoinsnews cited Bitcoin investor and Atlanta Digital Currency Fund partner Alistair Milne, according to whom, some 10% of all Bitcoin transactions are already SegWit-enabled and about 10% of Bitcoin users have started to experience significant decrease in fees.
Many service providers have yet to adopt the upgrade, including some of the largest Bitcoin wallets such as Bockchain and Coinbase.
The SegWit upgrade was activated in August, as part of a two-stage scaling proposal called the SegWit2x. The second part of the plan involves a twofold increase of the Bitcoin block size and is slated for next November. However, the increase could be rejected by a large subset of the Bitcoin community, which could lead to another split.
The founder and CEO of Gatecoin, Aurélien Menant, forecasts that the Bitcoin price could get close to $6,000 by the end of the year, but he also warns of a possible short-term volatility due to the upcoming for.
"The forthcoming bitcoin fork in November will result in greater volatility and risk for this new asset class," Menant told CNBC last week.
However, the upcoming fork may actually be contributing to the current rally. If Bitcoin splits in two in November, existing Bitcoin holders will be entitled to the same amount coins on both blockchains. So some investors may be beefing up their holdings ahead of the fork, in order to get more free coins after the event takes place.
In today’s trading, the Bitcoin price stood at $4,790.17, as of 09:42 BST. The cryptocurrency has gained 4.6% over the past 24 hours. It’s market capitalisation currently stands at $79.5 billion, which represents 52.1% of the digital currency market’s total value.
For further information on how to buy and trade Bitcoin, see our comprehensive Bitcoin guide.