Bitcoin hit a new record high Friday, coming within touching distance of the $8,000 handle.
The cryptocurrency was trading at $7,998.40 in the early hours, U.K. time, according to industry website CoinDesk. Bitcoin did pare some of those gains, however, falling as low as $7,535.85; it was trading around $7,750 by mid-morning.
It’s been a wild week for bitcoin, which sold off heavily last weekend, falling to around $5,500. Since Sunday, the cryptocurrency has risen from that low to Friday’s high, marking a 45% increase.
In that time, bitcoin’s market capitalization, or the total value of the digital coins in circulation, has risen from $92 billion to $130 billion, according to Coinmarketcap.com.
[Bitcoin price as of 17/11/2017 – 2.45pm]
The price dip last weekend came after an upgrade to the bitcoin network, SegWit2x, which was planned for November 16, was called off. The aim was to increase the transaction speeds of SegWit2x, which has increasingly slowed down over the years. If the upgrade took place, it would have caused what is known as a “hard fork,” causing a new bitcoin spin-off to be formed.
Two previous forks have already happened earlier this year, leading to the creation of bitcoin cash and bitcoin gold.
But support for the Segwit2x upgrade waned, causing developers to call off its planned implementation.
This appeared to be the initial catalyst for the sell-off.
But on Friday, Coinbase, one of the world’s largest cryptocurrency exchanges, said there is still a possibility of a fork.
David Farmer, director of communications at Coinbase, said on a blog post that a “small number of miners may attempt to go forward with a fork.”
Bitcoin is booming, digital currency hedge funds are sprouting at the rate of two a week and the value of all cryptocurrencies has surged tenfold this year to more than $170 billion. Newslook
A miner is a key part of the bitcoin network. It is a person who runs a “node”, or a high-powered computer that is able to solve the complex mathematical equitation required to verify bitcoin transactions.
If a large number of miners upgrade the software on their nodes, it could cause a fork. Farmer warned that this small number of miners still supporting the Segwit2x proposal could cause a fork.
If a fork happens, holders of bitcoin will receive the newly-created cryptocurrency called “bitcoin2x” for free, essentially giving them free money. That is why bitcoin rallied Friday.