Monero Hard-Fork Update May Be a Case of ‘Buy the Rumor, Sell the News’

Monero’s rising price has been screaming for attention for weeks. A planned upgrade to the software appears to have at least partially fueled the excitement.

On Oct. 17, Monero released the Oxygen Orion update via a hard fork. This update provides a number of bug fixes, improved security and better performance. Perhaps the most significant of these features is the CLSAG upgrade.

And the #Monero network has been upgraded!

Enjoy your 20% cheaper, lighter, and faster to verify private *by default* transactions 😉#MoneroKeepsBuilding #CLSAG

— Seth Simmons (@sethisimmons) October 17, 2020

CLSAG is an upgrade of MLSAG, the ring signature feature of Monero. Ring signatures are a popular cryptographic device used in privacy coins. Essentially, MLSAG is ring signature technology that allows a user to shield the identity of a transaction by jumbling it up among many signatures. A third party cannot know for sure which transaction came from where because it will appear to have many signatures. The CSLAG update uses a more efficient version of the ring-signature technology. These transactions will use less memory and will therefore be quicker by 10-20%, according to Monero. What’s more, the CLSAG update has been vetted and audited. Monero is also likely to add Atomic Swaps to its blockchain, which could also be viewed as bullish by investors.

The Monero Atomic Swaps CCS proposal has now been fully funded! #Monero #XMR #MoneroCCS https://t.co/46WHJa2KOD

— Monero Space (@MoneroSpace) October 16, 2020

Price Jump, Price Stumble

Monero has seen an almost 400% gain since March lows, with the past few months being particularly lucrative. The week ending Oct. 11 saw a 23% price increase in Monero. Meanwhile, Zcash, another privacy coin, saw a 17% jump over the same period. Interestingly, the price of Monero has dropped since Oct. 12, even after the (anticipated) update. The long- term gains are still quite large.

Privacy coins such as Monero and ZCash have had a strong week, +23% and +17% pic.twitter.com/SOipbs5DjC

— skew (@skewdotcom) October 12, 2020

Oct. 15 saw an all-time high in 24-hour volume for Monero, at over $1 billion, according to active community member Monero Trader. A  few events seem to be driving the price jump.

24h volume at all time highs. We reached over $1 billion USD in 24h volume. We averaged around $100 million USD last year. 👍 👍 pic.twitter.com/9RaQb2dFVS

— Monero Trader (@monerotrader) October 15, 2020

Some of it is regulation. The US Attorney General and Internal Revenue Service have stated that they will be putting cryptocurrencies under more intense scrutiny. Also, the U.S. Department of Homeland Security recently claimed to have been able to unmask Monero users, though that was questioned by the community. Still, there is a $625,000 bounty to anyone who can crack Monero. Though securely converting Monero to spendable fiat is still an obstacle to privacy, some users are likely seeing the privacy coin as a haven from taxes or law enforcement. Similarly, in the United States, three BitMEX executives were recently charged with running a derivatives exchange illegally, and China arrested an OKEx exchange executive over possible fraud. This caused a pause in withdrawals from the exchange giant. Monero has also been caught in the crosshairs of Europol, which has stated the privacy coin is often used for criminal activity. With many governments opening up to the idea of central bank digital currencies, it is within reason to expect a crypto crackdown.

The Price of Privacy

The old adage, “buy the rumor, sell the news,” seems applicable based on the past few days of Monero trading.

Some think the price could be a retracement of an epic bull run.

If only 1 altcoin survives, it should be #Monero, as the perfect compliment to #Bitcoin… atomic swap in and out of privacy. https://t.co/DScMpUe47J

— 🇺🇲 David Shapiro.HODL ⚡🐝 (@BitSpiro) September 27, 2020

Tradingview user placton0168 demonstrated through technical analysis that Monero is losing important support.

Meanwhile, Atomic Swaps will allow for cross-chain transactions, making both illegal and legal transactions to fiat or bitcoin simpler.

No matter what shitcoin you like, make sure to get some #Monero. This thing will eat Bitcoin lunch! https://t.co/6guVtQjGEq

— Stay at home until THEY take your soul (@TodorSlavchev) October 17, 2020

As the promise of Bitcoin’s anonymity is fading with the start of mainstream adoption, Monero’s privacy features could have more allure than ever.