Bitcoin tumbles after SeWit2x fork cancellation

Arnaud Masset Swissquote Bank Ltd

The price of Bitcoin flash crashed yesterday at around GMT 18:00 after Mike Belshe, CEO of BitGo, published a note explaining the reasons why they will not support the Segwit2x fork. The note was also signed by Wences Casares (CEO Xapo), Jihan Wu (Bitmain), Jeff Garzik (Bloq), Peter Smith (CEO Blockchain) and Erik Voorhees (CEO Shapeshift). The note explains that the initial purpose of SegWit2X was to improve Bitcoin scalability but also to reduce fess, which are quite elevated. However, this should be done by keeping the community together, Belshe explains, which cannot be done will only 30% support among miners. He regrets that they “have not built sufficient consensus for a clean blocksize upgrade at this time”.

Following the publication of the note, the price of Bitcoin exploded to $7,900 before falling as low as $6,978 at certain exchanges (13% move in less than 2 hours). The price finally stabilized at around $7,300 yesterday evening. Nevertheless, Bitcoin came under renewed selling pressing on Thursday morning as investors continues to price out the fork.

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It is also worth mentioning that there were rumours that a small group miners (that represents only 30% of hash power) will carry out the fork. However, it seems that investors are not buying it as the price of BTC resumed its debasement. On the bright side, alt-coins have rallied strongly as investors sell BTC and reallocate their portfolio.

Author

Arnaud Masset

Swissquote Bank Ltd

Arnaud Masset is a Market Analyst at Swissquote Bank. He has a strong technical background and also works in the development of quantitative trading strategies.

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