Bitcoin, the unchallenged number one cryptocurrency in the world, fell below $7,000 this morning, which is an eight-day low of $6,793. At press time, BTC/USD exchange rate is trading at $6788.28, which demonstrates the drop of 5.68%, according to CoinMarketCap.
The rapid weakening of Bitcoin after positive predictions and a new all-time-high earlier this week, on November 8, is mostly brought about by the suspension of the Segwit2x hard fork on Wednesday, which was followed by the rotation of money out of bitcoin and into alternative currencies.
The Segwit2x hard fork was the second part of the New York Agreement (NYA) scaling plan and would have increased the base block size to 2MB. Despite the fact that the plan originally enjoyed about 95% of Bitcoin’s hashrate backing it, support had been waning with an increasing pace and many influential signers backed out of the NYA on Wednesday morning.
SegWit2x was initially expected to speed up the transactions made within Bitcoin’s platform. The hard fork could have succeed if most participants agreed on the proposal, but instead of that, the company faced with the lack of consensus putting the whole network under the risk of splitting.
Jihan Wu, the co-founder of one of most recognized and valuable bitcoin companies Bitmain, and Roger Ver, Bitcoin angel investor, were also involved in the NYA, but b backed out of the agreement early through their own fork, Bitcoin Cash, a direct response to the User Activated Soft Fork (UASF) which enabled SegWit.
Bitcoin Cash (BCH) is the cryptocurrency created in August by “forking” the blockchain record that underpins bitcoin, creating a parallel network. It allows for bigger “blocks” of transaction to be processed, speeding up the network.
Joshua Raymond, a director at the foreign-exchange and CFD broker XTB, said:
“The delay to Segwit2x has damaged confidence amongst bitcoin investors concerning the much-needed resolution to speed up bitcoin’s slow processing speed. Everyone was hoping the Segwit2x would address this but unfortunately, the delay due to a lack of consensus on the mechanics has affected confidence. Confidence on transaction speed in Bitcoin has deteriorated significantly in recent months. As Bitcoin Cash enjoys much faster transaction speeds, we have started to see a recycling of positions out of Bitcoin into Bitcoin Cash as a consequence.”
The exchange rate of Bitcoin Cash to US Dollar was $870.90 this noon, which is up 30%. At press time, its exchange rate is traded at $876.50, according to CoinMarketCap.
Mati Greenspan, an analyst with the trading platform eToro, commented to the situation:
“After the 2x hard fork was called off, BCH is now being seen as a favourite to one day replace BTC. If the Bitcoin community doesn’t come to a consensus about how to scale the network soon, it may run into congestion, in which case people will need an alternative.”
What most people are now worrying about is whether or not the Bitcoin price will go up or down even further. The analysts say that both options are possible, it still remains to be seen.