It’s safe to say that November has been particularly devastating for the cryptocurrency market, as it lost around one-third of its entire capitalization in less than a week. Industry experts are tying the decline to the ongoing dispute among Bitcoin Cash (BCH) proponents.
The cryptocurrency market has seen roughly around $70 billion wiped out of existence in the past 7 days. The market’s forerunner, Bitcoin, (BTC) is currently trading at $4,494.93 – down about 30 percent in the last week, losing almost $2,000 of its value, shattering key supports on its way down. BTC is at its lowest point since October 2017.
The situation is depressing across the board as the entire market has been bleeding out. This caught the attention of the host of CNBC’s Cryptotrader, Ran Neu-Ner, who tweeted that “1/3 of the market been wiped out since Friday.”
1/3 of the market been wiped out since Friday. pic.twitter.com/mW29roUl9b
— Ran NeuNer (@cryptomanran) November 20, 2018
Amid the market tumble, XRP has managed to unseat ETH as the second largest cryptocurrency, and it’s ahead with over $4 billion in market capitalization.
What Caused It?
It goes without saying that the reasons for the current meltdown are multiple. However, industry experts across the board are tying it to the ongoing dispute among BCH developers.
Last Friday, BCH forked, resulting in the formation of Bitcoin ABC and Bitcoin Satoshi’s Vision (Bitcoin SV). Purportedly, both sides are mining blocks on their own blockchains at a loss in order to establish control.
Speaking on the matter was Independent Reserve’s CEO, Adrian Przelozny, who said:
Both sides are mining blocks at a loss, where the electricity and hardware costs are greater than the rewards from mining.
Purportedly, the groups involved in the clash have been in the crypto-field for a long time and they may have a lot of holdings. What is more worrisome, according to the experts, the clashing parties are likely to dump a lot of cryptocurrency on the market in order to be able to afford their mining operations, hence dragging the prices down.
According to Derek Henningsen, head of legal and compliance at Huobi’s Australian office, the hash wars might be impacting the prices. He said:
The recent Bitcoin Cash hard fork and the hash war between competing camps could be impacting on the price falls.
And it seems that one of the involved parties in the BCH hash war has been particularly straightforward in regards to dragging prices down.
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
— Dr Craig S Wright (@ProfFaustus) November 14, 2018
What do you think of the recent price decline? Will it recover anytime soon? Don’t hesitate to let us know in the comments below!
Images courtesy of Shutterstock, Twitter/@cryptomanran, and Twitter/@ProfFaustus.