The long-awaited Bitcoin Taproot Upgrade aired, but the price of the asset didn't match the buzz it generated. Some analysts believe it has already been valued in Bitcoin, while others argue that the real effect lies in the future.
Bitcoin's Taproot update
Bitcoin's first significant update in nearly four years aired over the weekend at block 709.632 amid enthusiasm for the improved features it announces for the network. Increased privacy, security, and scalability are some of the features that the Taproot update brings to Bitcoin.
According to Alyse Killeen, "Taproot is important because it opens up a wide range of opportunities for entrepreneurs interested in expanding the usefulness of bitcoin." The update is important due to its wide acceptability by a majority of stakeholders, which is in stark contrast to the 2017 segregated witness update that nearly split the network.
In addition to the improved features it offers, Bitcoin Bull rubbed his hands with glee as the activation approached in hopes that it could trigger a price rally. Since activation, Bitcoin's price has largely been quiet with prices seemingly stuck in a windless lull. A few days prior to the activation of the update, Bitcoin had reached an all-time high of $ 68,742, followed by a flash crash at $ 62.333 and a rally was expected to occur upon activation.
Bitcoin is currently trading at $ 63.997, which is a 1,13% drop on the last day and on the weekly charts, just a minute drop of 2,76%. Activity on the network fell to 6,03% as daily trading volumes hover around $ 29 billion. Here the quotation in real time.
Already evaluated?
Bitcoin's unimpressive prices raise the question of whether the update has already been priced well. Weeks prior to Taproot's activation, Bitcoin had continued to set a series of new all-time highs, coming in alarmingly close to $ 69. Some analysts who claimed that the update had played a significant role. For Edward Moya, an analyst at Oanda, the update has already been evaluated and, as such, "will have a minimal impact on the price of bitcoin".
Another faction believes that the real impact is yet to come as the update has yet to be fully adopted by users. Full applicability is believed to come in early 2022 and will be the catalyst for a steep price hike. Everything hangs in the balance and largely depends on the type of impact it has on the network.
“Although Taproot is generally a positive development. The verdict is still pending if it brings a major improvement to the blockchain world, ”says Hahoan Xu, CEO of Apifny. Shortly after Segwit was activated in 2017, Bitcoin grew by more than 50% and investors are hoping that, as a cyclical asset, history will repeat itself.
