The price of one bitcoin just can’t seem to stop dropping this year, from highs of near $20,000 at the beginning of the year down to below $3,800 at the time of writing. Just today, Bitcoin has fallen more than 13%. This week alone the worlds most traded cryptocurrency fell almost $2,000 from $5,650.
It seems the price of a bitcoin has only dropped this year and it looks like the trend will only continue. After a steep 15% decline, the price has momentarily settled in the $3,700 range. Other top cryptocurrencies didn’t fare much better during Saturday night’s slaughter. Ether dropped 20% to just above $100. Bitcoin Cash, still reeling from the hash war, has dropped all the way down to $170.
Tonight’s drop is the second major drop in the markets this week, originally falling from $5,600 to $4,600 early last week.
What’s to Blame?
Cryptocurrency markets are some of the most fickle in the world, making it very difficult to analyze trends or even find a specific reason for a catastrophic price drop. However, this price action does come after the Bitcoin Cash protocol upgrade and the subsequent hash war between BCH and BSV.
Leading up to the protocol upgrade, another development team known as SV, led by Craig S Wright, came onto the scene with a significant amount of the hash rate behind them. They issued dozens of threats in the weeks prior, saying to other industry leaders that if they did not “win” they would make every single cryptocurrency untradeable for two years.
Lots of miners switched to mine BCH as the war started, moving their hash rate from Bitcoin despite higher potential profits on the BTC chain. They moved their hash rate in order to have a vote on the BCH chain. The day before the start of the war, Wright tweeted about this possibility.
To all BTC miners…
If you switch to mine BCH, we may need to fund this with BTC, if we do, we sell for USD and, well… we think BTC market has no room… it tanks.
Think about it. We will sell A Lot!
And, have a nice day
(BTC to 1000 does not phase me) pic.twitter.com/oUScEahtWc
-mdash; Dr Craig S Wright (@ProfFaustus) November 14, 2018
During this war, both the BCH side and the SV side are losing millions of dollars mining on their respective chains. Both sides are also thought to control vast sums of BTC, selling their coins in droves to finance this war. The BCH reward fell significantly on November 15th which coincides with the beginning of the hash war. Thankfully, the hash war appears to have come to an end – we hope.
What do you think about the recent price decline? Will Bitcoin recover? Let us know in the comments below?
Images courtesy of CoinMarketCap, Shutterstock
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