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What Caused the Bitcoin Price Drop?
It has been a crazy ride for the last couple of weeks. In this article we will look at why the Bitcoin price has dropped and what could have caused this and what is likely ahead.
I have been through a number of huge swings in the price of Bitcoin so keeping calm is somewhat easier than for those new to the space. I am surrounded by people who bought above 10K, and explaining the current drop is never easy. The following opinions are just that, my opinions.
I firmly believe the recent hard fork of Bitcoin cash is a huge catalyst for why we have seen this Bitcoin price drop. It is difficult to see exactly, what the main players in Bitcoin Cash, namely Craig Wright and Calvin Ayre of Bitcoin SV and Roger Ver and Jihan Wu of Bitcoin ABC have done to directly influence the price of Bitcoin, but my thinking is that they have sold a large amount of their BTC holdings. They could have done this for the following reasons:
- Hash war. These two warring camps have fought for control of Bitcoin Cash. This has meant allocating huge amounts of hash rate or mining power. They may well have sold off BTC to finance this.
- The value of their projects. It is also possible that they could be buying up their own new coins. Bitcoin SV has seen huge increases in the last few days jumping 60% a day on November 25th and 26th and is still on the rise at the time of writing. Keep an eye on this people and understand who is behind this project, we will help you with this.
Is the Hash War Really Over?
The Bitcoin SV camp has stated the Hash war is over as of November 26th. The chain has split into two coins and Bitcoin SV has implemented replay protection.
The huge amount of money expended in this ‘Dick Swing’, a phrase loved by Craig Wright of Bitcoin SV, could have been a lot more as Wright said he was committed to stringing up and bleeding out Jihan Wu of Bitcoin ABC and Bitmain over a period of years not weeks. https://en.wikipedia.org/wiki/Jihan_Wu. Wright said he would mine Bitcoin Cash ABC with empty blocks and halt transactions on that network. Hugely aggressive behavior and very unsettling for the whole market. Think of it as selling your product at a loss to put your competitor out of business by exhausting their cash.
Hard Fork Fuckery
The fact the chains have now hardforked into two coins doesn’t mean this empty block mining can’t still happen, but is not as likely, given Calvin Ayres recent statement that Bitcoin SV doesn’t care about being the real Bitcoin Cash. This may calm the market down but it is a wait and see, as I believe Craig Wright is someone we will be hearing a lot from. Calvin Ayre, https://en.wikipedia.org/wiki/Calvin_Ayre
Wrights partner, in his statement this week that ‘they don’t want to be called Bitcoin Cash as they are the real Bitcoin’, makes me think a bigger move might be ahead. What most people know as Bitcoin is called ‘Bitcoin Core’ by these guys. Could they make some major plays in the coming months, to position their coin as the real Bitcoin in more minds, I think they will. The war might just be beginning on bigger fronts. We will be keeping a close eye on this development.
Here is a great video that I encourage you to watch if you are not fully aware of who Craig Wright is.
What is next for Bitcoin Cash and its Hard Forks?
Will these two projects go their peaceful ways and effectively continue what they have been doing since the Bitcoin hard fork last August, trying to convince people that they are the real Bitcoin? In my opinion they will not go peacefully! I suspect this will heat up and could have the effect of damaging the overall space. It was difficult enough explaining that we had two Bitcoins last year, now we have many, only three that are worth taking note of though being Bitcoin, Bitcoin SV and Bitcoin ABC. The later two have Billionaires at the helm and it would be foolish not to study what is going on. Calvin Ayre and his company Coingeek have a conference in London tomorrow and we will looking closely at the commentary from that in our next article.
What is next for Bitcoin and its Forks?
Bitcoins price is being affected by the forking drama in my opinion. This may remain the case for the short term and it is important to understand the parties involved and why they are doing what they are doing. Bitcoin is still by far the dominant coin and I think it will remain so, but right now the trust in Crypto as a whole has been dented. For the trader, volatility will have many licking their lips. For many this price must be nearing ‘sell the house’ and get in. For the HODLERS……..Respect! Stay tuned people this is just heating up.