Bitcoin and Ethereum fall to the minimum not seen since 2017


Bitcoin and Ethereum fall to the minimum not seen since 2017

Omar Marques / SOPA / LightRocket images through Getty Images

All the major cryptocurrencies fell sharply on Monday morning, with many levels of blows not seen since 2017.

Bitcoin fell below $ 5,100, a minimum not seen since October 2017. The currency of Ethereum, ether, fell below $ 155, a decrease of 25 percent from last week. The value of Ether has not been so low since July 2017.

Weekend losses are a continuation of last week's selloff.

Nobody knows why the cryptocurrency market has turned into a similar bloodbath, just as no one really knew why cryptocurrencies enjoyed such a spectacular increase a year ago. But it seems probable that one factor is the continued turbulence of Bitcoin Cash, the third most decentralized cryptocurrency of greater value.

Bitcoin Cash was created in August 2017, when a dissident faction of Bitcoin supporters created their own rival version of the software. This version was incompatible with the mainstream version, creating two separate versions of bitcoin blockchain with a shared transaction history, a situation known as difficult fork.

Last week, the Bitcoin Cash community had a second fork. Two factions within the Bitcoin Cash world have not been able to agree on a proposed upgrade to Bitcoin Cash. There are now two versions of Bitcoin Cash, called Bitcoin Cash ABC and Bitcoin Cash SV.

The markets are waiting to see if both versions survive as independent bitcoin-based networks. So far, the "ABC" variant has attracted a larger share of bitcoin miners, and the futures markets have given a higher value. In the next few days, the miners of the Bitcoin Cash SV faction may decide that it is not worth continuing to run an independent network, although they have not shown any sign of doing so until now.

In theory, the Bitcoin Cash schism should not influence other cryptocurrencies. But the cryptocurrency markets are subject to a pack mentality. When a cryptocurrency falls, others also tend to fall.

The acrimony in the Bitcoin Cash community could remind investors of how blockchain-based networks can be fragile. Regardless of how the Bitcoin Cash schism ultimately resolves, it is unlikely that the episode will strengthen the Bitcoin Cash brand. There is the risk that technical disagreements or personality conflicts within other important blockchain networks can lead to similar divisions, damaging the long-term value of their cryptocurrencies.

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