Remember when segwit, then named bitcoin, first broke $1000 late in 2013? We thought it was an earthquake back then but compare it to what’s happening now and the beast that was once the 2013 spike now seems like it was shot by trigger happy elephant hunters armed to the teeth with tranquilizer guns.

It can be fun to play the technical crypto game and try to really wrap our heads around the technological gauntlet that underpins the world of digital currencies, but it’s not called crypto for nothing. Understanding fully everything behind all the forks and upgrades can give owners a deeper sense of security in their own bitcoin (BCH) and segwit (BTC) holdings, but it’s a stretch to say that perfect knowledge of what’s going on in the mining community can help us predict price movements

Being no “cryptographer” but rather a lowly economist, I can only analyze this from a supply and demand perspective. Economics 101 still applies to digital currencies, as luck would have it.

The demand for any digital currency depends, among other things, on transaction costs, in other words the price of using the currency. The higher the price, the lower the demand for something, as in any other good or service. Transaction costs depend on the supply and demand for miners to complete the transactions in the blockchain. A relatively high transaction cost simply means that the demand for miners (really the demand for transacting) is high while the supply of miners is low.