- Bitcoin price fell by more than 12 percent in the last 24 hours
- $30 billion wiped out of the crypto market
- Bitcoin Cash hard-fork blamed by many
The global cryptocurrency market witnessed a massive downturn in the past 24 hours, as the premier cryptocurrency bitcoin tumbled by more than 10 percent, trading at $5578 at press time.
However, the timing of such a large scale slump becomes interesting when one sees the current state of events facing the crypto industry.
Controversial bitcoin fork, bitcoin cash is slated to fork on November 15, 2018. Moreover, the CBOE Bitcoin futures expiration is also blamed by many in the community for the market crash. So who is responsible for almost $30 billion wiped out of the cryptocurrency market?
Bitcoin Cash Hard-Fork Nuisance
The long-awaited hard-fork has divided BCH proponents into two camps. Bitcoin ABC, and BCH SV. While the former is called the “original” Bitcoin Cash client which forked from bitcoin in 2017, the latter is led by the controversial Australian business tycoon Craig Wright.
Craig Wright is best known for his unsuccessful attempt at claiming he’s the real Satoshi Nakamoto, the moniker used by the creator of the world’s largest cryptocurrency.
Both the camps are to introduce major changes to their respective forks.
Bitcoin ABC will introduce a number of changes, including, canonical transaction ordering, enforcement of minimum transaction size to prevent the attack on Merkle Tree, and making push-only compulsory for scriptSig, among other things.
On the other end of the spectrum, is Craig Wright’s rather ironically named Bitcoin SV (Satoshi’s Vision.) The fork has its own slew of features. However, many believe that the self-proclaimed brains behind Bitcoin, aka “Faketoshi” is the one responsible for the market bleeding red on Thursday. And if some of Wright’s recent tweets could be considered the North Star, things might turn worse.
Wright tweeted on November 14, 2018, that miners switching from BTC to BCH might force him to sell his large BTC holdings resulting in its price to tank. Wright also stated that the price of BTC falling down to $1000 would not faze him.
Shortly after the tweet, the market displayed a knee-jerk reaction as the price of all the cryptocurrencies came crashing down.
Wright added that BCH proponents Jihan Wu and Roger Ver would also be forced to sell their BTC to pay for rented hashpower. If they do, don’t be surprised to see bitcoin price levels of 2014.
To no one’s surprise, the Aussie billionaire drew a lot of criticism over his tweets, with some people calling him downright evil.
CBOE Futures Expiration
Another plausible explanation for the crypto bloodbath could be the Chicago Board Options Exchange (CBOE) bitcoin futures closure.
With regard to their impact on bitcoin’s price, BTC bought over the counter (OTC) could be used to sell on any crypto exchange to artificially inflate the supply and manipulate the price downwards.
However, in the case of the CBOE futures, the same big scale investors or “whales” could place large shorts on BTC price. This ensures enormous gains for the traders while losing very little selling BTC.
In case these large investors sell BTC before the futures closing date, then a depressing sentiment could breed in the market, subsequently maximizing trader’s profits.
With that said, no one exactly knows what caused the prices to tank. It could be BCH hard-fork, could be CBOE bitcoin futures closure, could be a combination of both the factors and might as well be something entirely different.
Concluding, crypto veterans would be pretty used to such occasional slumps in the industry and should not be losing their sleep over it. Especially with the launch of ICE’s Bakkt on the cusp, things could change in an instant. To what direction, that remains to be seen.