Dash Price Climbs 60% As Cryptocurrency Market Dips

While leading digital currencies like bitcoin saw dwindling prices this week, one lesser-known currency called Dash made massive gains.

Dash prices experienced an impressive surge heading into mid-November, moving from about $319 to $520 in the span of just 12 hours. Since then, it has retreated somewhat, and as of this writing is hovering around $430.

Still, even if the 60% boost was only fleeting, it does prompt some analysts to wonder why it happened in the first place.

Scaling Led to Price Fluctuations

The biggest news in the cryptocurrency space in the past week was that bitcoin’s developers decided to abandon the SegWit2x protocol and the subsequent hard fork of the currency. (See more: What Happens Now That the Bitcoin Hard Fork Was Canceled?)

This plan had been in the works for months, with a broader conversation about the scaling issue having taken place for several years. So it jostled the markets when developers unexpectedly canceled the fork just days before it was set to take place.

By comparison, dash has already started its own scaling process, activating a block size upgrade for its network, according to Coin Telegraph. This process will boost blocks to 2 MB each. This block size is still smaller than that of bitcoin cash, but it’s possible that the news of bitcoin’s canceled hard fork prompted some investors to move their funds to dash instead.

Dash has quietly anticipated its own scaling difficulties and has determined a course of action known as an on-chain path. (See more: The Rise of ‘Private’ Cryptocurrencies.) This means that dash will not use separate payment channels, like the Lightning Network that bitcoin is adopting. Instead, dash will make use of extra-large blocks.

Evan Duffield, dash’s founder, indicated earlier this year that “we intend to show just how far an incentivized second-tier [masternode] architecture can take a project like dash.”

Version 12.2 Upgrade

Dash’s bigger blocks are just part of a network-wide upgrade called version 12.2. Besides the block size increase, this upgrade also entails a transaction fee reduction, security protections, speed upgrades, and the introduction of new wallets, among other features.

All of this is anticipated to make dash’s new project, Evolution, more streamlined when it emerges in 2018. In the meantime, these smaller steps in that direction are likely attractive to investors.

Finally, it’s possible that the quick price boost dash experienced was as a result of pump and dump schemes. In these cases, investors with large sums of money buy up sizable volumes of an asset, squeeze the shorts, and then sell off that asset once new investors enter the field, making the price even higher. Pump and dump is, of course, not related directly to the developers of a new cryptocurrency, so this would be a possible external factor impacting dash’s price.

Author: Nathan Reiff
Original link: https://www.investopedia.com/news/dash-price-climbs-60-cryptocurrency-market-dips/