Bitcoin price crash: another dip for Cryptocurrency

5 years ago - Published in Fintech Land

Bitcoin has dipped below $5000 for the first time in 13 months. The cryptocurrency has plunged nearly 14 per cent over the past 24 hours to trade at $4843 early on Tuesday, nearly 25 per cent down from a week ago.

It came amid a broader sell-off of that wiped nearly $24 billion off the market capitalisation of more than 2000 tokens tracked by Coinmarketcap.

Bitcoin hasn’t traded at $5000 since October 12 last year when it briefly passed through the milestone during its meteoric run-up to an all-time high of $20,000.

The digital currency has hovered around the $6000 mark for most of 2018 after the entire cryptocurrency market crashed at the start of the year, but many enthusiasts believed it would not drop below $5000 again.

The latest sell-off was largely driven by fears last Thursday’s so-called “hard fork” in bitcoin cash — controversially splitting the bitcoin offshoot into two separate currencies — would destabilise the market.

Bitcoin’s precipitous drop began early last week as bitcoin cash, the fourth-largest cryptocurrency, devolved into an all-out civil war. The bitcoin cash hard fork, which was executed Nov. 15, resulted in the creation of two competing chains vying for control of the network. The so-called hash war between bitcoin ABC and bitcoin SV continues to this day. And while the primary implementation (ABC) has the upper hand, backers of the competing SV protocol have vowed to continue fighting for the long haul.

In the meantime, cryptocurrency exchanges have struggled to execute the chain split, with some platforms taking an entirely different direction than the one they stipulated prior to the hard fork.

The Hong Kong-based OKEx exchange faced severe backlash Monday after it changed the terms of its bitcoin cash futures contracts without warning. As Bloomberg reports, the exchange forced the early settlement of BCH contracts on Nov. 14, resulting in severe losses for some of its traders. The firm had $135 million worth of BCH derivatives contracts on the books at the time of the forced settlement.

The outcome of the bitcoin cash hard fork will have direct implications on BTC and the broader cryptocurrency market. Craig Steven Wright, one of the main backers of SV, has threatened to crash bitcoin’s price all the way down to $1,000 if BTC miners switch to mining BCH.