Bitcoin’s price exploded this week, and the USMS has completed its final auction of seized coins. Here are the cryptocurrency highlights of week 45:
- The Bitcoin price itself became big news this week as it peaked above $500 for the first time since August 2014. This number reflected a 60 percent increase compared to last week’s rate of $311 per coin, and left many guessing at what was fueling the rally. The price, however, dropped back below $400 soon afterward. Nevertheless, the price managed to hold on to a weekly gain of almost 25 percent now trading at about $387 per coin. It is also the biggest weekly gain so far in a winning streak that has lasted for seven weeks already.
- The US Marshals Service (USMS) has auctioned off its final batch of the 174,000 Bitcoins it had originally seized from online drug market place Silk Road. The USMS couldn’t have picked a better moment to auction off these coins, as Bitcoin’s price peaked shortly before the auction. Although details are not provided to the public, the market value of the 44,000 auctioned coins was around $20 million. When the auction was announced last month the batch was worth “just” $10 million. The actual result of auction could have been disappointing however, since the number of bidders was reported to be quite low.
- The blocksize debate also heated up again this week as increased transaction volumes put a lot of stress on Bitcoin’s processing capacity. It was reported that blocks were now consistently full, while the number of transactions waiting to be included in a block (the mempool) peaked around 200,000. The latter resulted in processing delays, and a significant increase in the average transaction fee paid in order for users to get a priority spot in the queue. A solution should, however, not be expected any time soon. It will take another month of waiting before potential solutions will be discussed at the second Scaling Bitcoin workshop, held in Hong Kong on December 6.
- Magister Advisors, known for advising the technology industry on mergers and acquisitions, has interviewed thirty of the world’s leading Bitcoin companies and found a consensus view that Bitcoin will be the sixth largest global reserve currency by 2030. If this were to become reality, Bitcoin would find itself between the Swiss franc and Australian dollar.
- Bitcoin becoming the sixth largest global reserve currency is probably Jamie Dimon’s worst nightmare, as the CEO of JPMorgan has revealed this week that he believes Bitcoin will not survive in the long run. According to Dimon “there will be no real, non-controlled currency in the world. There is no government that’s going to put up with it for long … there will be no currency that gets around government controls.” Dimon seems to be forgetting that Bitcoin has been banned in several countries already, including jail-time for those caught using it. This so far has not stopped the digital currency, which is made to survive thanks to its decentralized nature.