A Look At Bitcoin's Weekend Crash
|The price of bitcoin bounced back aggressively Monday morning after tanking more than 15 percent on Saturday.
What Happened
Bitcoin spit from Bitcoin Cash back in August, and now digital currency developers are once again disagreeing about the next direction for digital currency. A potential bitcoin update called SegWit2X that would have increased the size of the blocks in bitcoin’s blockchain had originally been scheduled to go into effect November 16 but was nixed at the last minute amid opposition from Bitcoin supporters.
According to cryptocurrency experts, bitcoin investors who supported the SegWit2X update likely dumped their bitcoin and bought Bitcoin Cash on Saturday, sending bitcoin prices tumbling and Bitcoin Cash’s price soaring to $2,500. Bitcoin Cash even briefly passed Ethereum as the second-largest global cryptocurreny by market cap before the price pulled back on Sunday.
Also on Sunday, yet another bitcoin offshoot, Bitcoin Gold, added to the confusion and volatility. Bitcoin Gold promises to make the process of mining cryptocurrency less dependent on high-powered and specialized technology.
Why It’s Important
Bitcoin naysayers point to the extreme volatility and the lack of tangible value in the cryptocurrency as reasons to be skeptical of its extreme gains in recent years, but bitcoin has proven resilient in the face of adversity time and time again. On Monday, Bitcoin once again bounced back by 11 percent, trading back up above the $6,500 level.
The Bitcoin Investment Trust GBTC 2.16% was down about 2.2 percent.
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