With the upcoming split of Bitcoin, the cryptocurrency market is entering into a period of uncertainty. The net effect of this doubt is that the value of other digital currencies has crashed while Bitcoin continues to soar. The hard fork that many are forecasting when Bitcoin does split again has really got a lot of investors fearing the worst, which has pushed Bitcoin levels higher.
Why has Bitcoin risen on this market uncertainty?
Bitcoin is undoubtedly seen as the safe-haven currency in the digital arena. When there are times of doubt in the markets, then investors will take money out of other cryptocurrencies and put it into Bitcoin. This serves not only to protect their investment if the market takes a dive south, but also explains why Bitcoin has continued to trend upwards to near record high levels.
What is causing this market nervousness?
Come November time, Bitcoin is due to extensively upgrade its underlying Blockchain network to increase transaction speeds and reduce costs. While this sounds a fine idea in principle, it has caused many to worry about the potential consequences it may involve.
Chief among the concerns is the fact that for the period just before and after the proposed update, the exchange markets may be down meaning no transactions can take place. Some miners are unsure as to whether they will use the new update software as well, meaning that two competing versions of the network could be running at the same time.
Could the market tank?
Taking into account the above, many are wondering if some of the other cryptocurrencies may experience difficulties after Bitcoin’s split. While this may be true, Bitcoin will actually be relatively untouched by any of these troubles and instead most likely use its safe-haven status to continue its dominance of the cryptocurrency market.