Bitcoin, up 3% in the last 24-hour trading period to over $9,000, has exploded into 2020—adding around 30% to its value since January 1.
The bitcoin price is still half of its all-time high set in late 2017 and significantly down on 2019’s high of around $13,000 but bitcoin bulls appear to be back in control and have put Wall Street on notice.
Bitcoin and cryptocurrency market watchers are now looking ahead to 2020 with many pointing to bitcoin’s May halving as the likely catalyst for the next move higher—though there could be a more important development on the horizon.
Bitcoin is expected to be upgraded in a so-called soft fork later this year, a development that’s been called “one of the most innovative additions” that bitcoin’s had.
The soft fork, which is a change to a cryptocurrency’s protocol that doesn’t require all nodes to be updated and is backward-compatible, is expected to improve bitcoin’s privacy and scalability.
The three planned proposals—Schnorr signatures, Taproot schemes and Tapscript language—could be incorporated into the bitcoin network by the fourth quarter of 2020.
“Bitcoin will soft-fork this year. It will be one of the most innovative additions to [bitcoin’s layer one] thus far,” Lucas Nuzzi, an analyst from Digital Assets Research, said this week via Twitter, adding the soft fork will likely happen in the final three months of the year.
“These are powerful foundational technologies that will bring novel smart contracts to bitcoin’s base layer,” Nuzzi said. “2020 will be good.”
Meanwhile, a survey by bitcoin and cryptocurrency news and analysis site The Block found that the coming upgrade is being closely followed by bitcoin community with some high profile bitcoin developers predicting it will make transactions cheaper and enable the development of new features, such as the somewhat controversial Lightning network.
“There will no longer be any penalties in terms of fees for multisig and that should lead the industry toward using best practices,” Jimmy Song, a Bitcoin Core developer and Bitcoin Fellow at Blockchain Capital told The Block.
“We expect that this will create more interest in Lightning in general as the bleeding edge of bitcoin will be a little less bloody. Finally, we expect Taproot to be incorporated by more wallets and more interesting features built for those who are securing their bitcoin.”
In other major bitcoin developments this year, Bakkt, a New York Stock Exchange-owner backed bitcoin and cryptocurrency venture, is planning to launch a consumer app for cryptocurrency purchases in 2020.
U.S. coffee chain Starbucks will be its first launch partner, with the company one of the original backers of the crypto project, along with software giant Microsoft and Boston Consulting Group.
Elsewhere, bitcoin bulls have cheered the news cryptocurrency asset manager Grayscale recorded inflows of $600 million last year, signalling institutional money has finally arrived in bitcoin.