The last couple of weeks towards March’s end saw Bitcoin fighting off scalability issues and ETF rejections that staggered prices. Just when things picked up from the Winklevoss ETF rejection and prices were looking optimistic, the blocksize debate has slipped up the prices again bringing the price to just under $1000 levels. However, in the first week of April, things look very optimistic for the cryptocurrency as Bitcoin prices have increased by 8% with the digital asset trading over $1,100. (Read more reviews about Bitcoin investments here.) Fundamentally there have been many positive re-enforcers during the week for the change in the winds. Let’s dive deep into the most significant positives for the week.
Mexico recognizes Bitcoin as a digital asset
Mexico has had problems arising due to unstructured economic planning. Added to that, it is also the 4th highest country for inflow of remittances. These characteristics have created an ideal environment for Bitcoin to step up and thrive constructively on these positives. While the idea is certainly positive, the Mexican Government has signed a bill that classifies Bitcoin as a ‘Digital Asset’ and sets forth rules for Bitcoin exchanges. The wide consensus has been noticed in support of the bill among disparate political parties with an eye towards benefits for the economy triggering more foreign investment to help local industries and businesses grow.
Bitfinex redeems its tokens
On August 2nd, 2016, the leading bitcoin exchange by USD volume Bitfinex has suffered a major hack where 119,756 bitcoins were stolen. This forced the exchange to issue “Recovery Rights Tokens” as an IOU to customers. These tokens were set to be traded as BFX tokens and are to be paid back as soon as they hit $1 which is their underlying value. Bitfinex has made good on their promise and as of 4th of April, the exchange announced that it is now paying off debts in full. Redemption started late last year with BFX tokens trading well below the $1 value and being termed as a scam to buy more time. However, the exchange intermittently reimbursed hacked customers, proving their commitment towards the services they provide.
Forking has reached consensus
After two years of heavy debating, the scalability issue that has plagued Bitcoin in phases has finally found a solution. Bitcoin developers both from Core and Unlimited will merge within two weeks to a maximum block size increase to 4MB. This will then further increase by 25% yearly until 32MB. 4th of July is the designated date on which Bitcoin will hard fork and any node left on the original Bitcoin network would be cut off. All the nodes are expected to upgrade by this date with the requisite hardware that makes this possible set in place. Since the debate has now become harmless, bitcoin prices are now soaring high and look good for weeks to come.