Bitcoin prices rebounded on Tuesday, overcoming sharp volatility tied to rumors of a “hardfork” split in the crytocurrency.
The BTC/USD exchange rate rose 3.9% $1,082.36 at 7:49 a.m. ET. Prices were trading near the daily high of $1,041.30.
Prices plunged below $1,000 last week amid speculation of a “hardfork” split in the crytocurrency, which analysts say would represent a radical shift in the direction of bitcoin. The move would effectively make bitcoin less efficient to use, leading to a sharp drop in its value.
A hardfork statement was issued by 18 major bitcoin exchanges last week. Prices immediately sunk to one-month lows.
According to Crypto Coins News, the 18 exchanges were Bitfinex, Bitso, Bitbank, Bitonic, Bitstamp, Bitsquare, Bittrex, Bitt, BTCC, Btcchina.com, Coincheck, Coinfloor, Kraken, QuadrigaCX, Ripio, ShapeShift, The Rock Trading Ltd. and 7Laif.
It was reported last month that roughly 900,000 bitcoins, collectively valued at around $1 billion, were stuck due to limited transaction capacity. The hardfork solution, analysts say, make it possible to overcome the backlog issues currently plaguing the cryptocurrency community.
Bitcoin has had a volatile start to the year, as concerns of regulation in China sent prices spiraling. The added layer of volatility comes at a time of heightened demand as investors seek diversification away from fiat currencies tied to central bank instability.