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.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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