Bitcoin plunges to 19-month low as crypto chaos spooks investors
Bitcoin has plunged to its lowest price since early May 2017 as the ongoing chaos in the Bitcoin Cash community continues to spook investors.
Analysts point the finger for the price drop in several directions, including a recent U.S. Securities and Commission initial coin offering settlement. But most rank the Bitcoin Cash hard fork as the impetus behind most of the downward price pressure on cryptocurrencies, including bitcoin, over the last week.
Bitcoin Cash is both a rival cryptocurrency to bitcoin and a fork or split-off of cryptocurrency that launched in August 2017. Bitcoin Cash split in two on Friday after a longstanding dispute between factions led by Roger Ver, aka “Bitcoin Jesus,” and Craig Wright, the Australian who once claimed he was bitcoin founder Satoshi Nakamoto.
On one side is Ver and Bitcoin Cash ABC, the ABC standing for “Adjustable Blocksize Cap.” That involves Bitcoin Cash moving beyond money transfers to support smart contacts in a similar fashion to Ethereum, complete with a blocksize cap that can be adjusted to support the market.
The other side, backed by Wright, is Bitcoin Cash SV — the SV standing for “Satoshi’s Vision” — that argues Bitcoin Cash should be used solely as a form of stable global money with a set block size at 128 megabytes.
Although Bitcoin Cash peacefully split off from bitcoin, with bitcoin continuing on its merry way, the problem with the Bitcoin Cash split is that it’s a battle for who controls Bitcoin Cash and that continues to cause chaos in the markets.
Some exchanges are now offering both BCH ABC and BCH SV trading. Others, notably Coinbase Inc., continue to offer a single BCH option, while still others are throwing their support to one or the other. There’s also no easy compromise on the horizon: Domination and hence control of Bitcoin Cash comes down to support from miners and Bitcoin Cash holders, although momentum appears to be shifting to BCH ABC.
In addition to the instability and its downward pressure across the board, The Telegraph notes that the drop in the price of bitcoin may stem in part from the arms race having “drained computing resources away from bitcoin itself, thus reducing the perceived demand for the original cryptocurrency.”
Others noted that the price drop may reflect the broader bear market.
“While most are blaming the Bitcoin Cash ‘hard fork’ as a key player behind Bitcoin’s weakness, technicals could have played a role,” Lukman Otunuga, a research analyst at FXTM, told Business Insider. “The weekly close under the $6,000 level was a bearish confirmation of further downside. The cryptocurrency has scope to extend losses if sellers are able to conquer the $5,000 level.”
Whatever the reasons, bitcoin was trading at $4,884.98 as of 9:30 p.m. EST, its lowest level since May 1, 2018 and down 12 percent for the day. The red ink was across the board, with Ripple XRP down about 5 percent, Ethereum down 13 percent and Litecoin down 15 percent.
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