Bitcoin has swung into the green today after plummeting yesterday afternoon, with the bitcoin price jump moving the wider cryptocurrency market, including ethereum, Ripple’s XRP, and rising star Tron sharply higher.
The bitcoin price is off to a volatile start to the year despite the hopes of many investors and traders that the bear market of 2018, named crypto winter for its debilitating effect on the bitcoin sector, would have ended.
Bitcoin is up by almost 3% over the last 24 hours, according to the latest prices from the Luxembourg-based Bitstamp exchange. Meanwhile, ripple (XRP) is up by 3% and ethereum is up over 7%.
Tron, which has styled itself as a competitor to ethereum’s decentralized app platform, is up by more than 10%.
Bitcoin and the crypto markets’ wild swings over the last few days have been widely attributed to looming fork of the ethereum blockchain, with previous forks of major digital tokens causing chaos on trading markets.
Last month, closely followed economist and a cryptocurrency trader Alex Krüger tweeted he expected the reaction to the upcoming ethereum hard fork would be “bullish.”
“Once mining is past the initial (painful) adjustment period, less mining supply mined by fewer miners will be decidedly bullish,” Krüger wrote.
The hard fork, which usually means a cryptocurrency splits in two, will see ethereum miner rewards fall from three ether to two and decrease the block time, making the network faster. The update is set for January 16 and is thought to be a key component of ethereum’s transition from using a proof of work protocol to proof of stake.
Cryptocurrency forks do not always mean their value rises, however.
Bitcoin forks have previously led to minor drops in the bitcoin price in the short term. When bitcoin cash forked from the bitcoin network in July 2017, bitcoin dropped some 4%—though bitcoin had risen strongly in the months leading up to the fork and continued to do so in following months before peaking in December 2017.
Bitcoin cash itself then rallied hard ahead of its split in November last year. The bull run proved to be short-lived, however, with both bitcoin cash, and the hived off bitcoin SV, falling sharply in following weeks.
The ethereum price has lost some 80% from its peak 12 months ago, as many of the digital tokens built on the ethereum network failed to hold their value. However, ethereum co-creator Joe Lubin called the “cryptobottom of 2018” in mid-December, saying it was “marked by an epic amount of fear, uncertainty, and doubt from our friends in the 4th and crypto-5th estates.”
Meanwhile, the market is also expected to be moved so-called bitcoin and cryptocurrency whales moving their stash of coins.
It was last week reported a large number of bitcoin and cryptocurrency holders who hadn’t touched their holdings for between six months and more than two years began moving their coins, according to analytics provider Flipside Crypto.
The data from the Boston-based firm, first reported by newswire Bloomberg, found digital wallets that have been active in the last 30 days now holding about 60% of the circulating bitcoin supply.
Earlier today a Twitter bot that tracks large bitcoin transactions recorded a 1,499 bitcoin move, worth $5.4 million.
“It’s definitely a big shift,” Eric Stone, head of data science at Flipside, told Bloomberg. “There’s more potential than usual for price swings.”