Will Taproot influence the price of Bitcoin?
By: Daniel Fortuna, economist
In the whitepaper published by Nakamoto in 2008, it is proposed to use a decentralized ledger of transactions packed in blocks secured by cryptographic algorithms, which we know as a “blockchain”.
The last time such an update was made was in the second quarter of 2017.
Now we face a new update to the Bitcoin blockchain that, he assures, will improve its operation.
This update will arrive on November 16, its name is Taproot, and its objective is to reduce the amount of data that will be transferred and stored in the blockchain, that is, there would be lower transaction rates and also a higher one will give more security to Bitcoin
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But a lot has been said in recent months about this technical part, and it is not the objective of this column to add anything about it, but to see what could happen to the price of the currency or, at least, to see what happened in the previous update. , August 2017
On August 1, 2017, Bitcoin was trading at $ 2,718.26, and 30 days later, on August 31 of that year, its price reached the $ 4,703.39, this is an increase of more than 70% in a single month.
Source: Own elaboration with data from https://coinmarketcap.com/
Source: Own elaboration with data from https://coinmarketcap.com/
After some ups and downs, at the end of December of that year it was worth more than $ 14,000.-, to then enter a violent fall until August 2018 when it reached a minimum of about $ 750, and then, after this disaster, start a climb that just stopped in March 2021.
Source: Own elaboration with data from https://coinmarketcap.com/
Was the strong rise produced in the second half of 2017 a product of the blockchain update in August of that year?
See more: Bitcoin pushing towards fresh all-time highs this week
Will the phenomenon repeat itself after the Taproot update?
There is little time left to unravel the unknown, but it seems like an opportune moment to take a look at the history of Bitcoin and its previous blockchain update.