Bitcoin’s investors are losing confidence as its price continues to drop past 5% at $6773.29 in just 24 hrs and its lowest, since November 1st. Traders have begun to bet on the coin’s ‘offshoot’, Bitcoin Cash, which split from its original version back in August.
Analysts say the surge is down due to developers pulling the plug on SegWit2x, a planned upgrade aimed at improving transaction speed on the network.
The Director of the CFD Broker XTB, Joshua Raymond, told Business Insider:
“The delay to Segwit2x has damaged confidence amongst bitcoin investors concerning the much-needed resolution to speed up bitcoin’s slow processing speed. Everyone was hoping the Segwit2x would address this but unfortunately, the delay due to a lack of consensus on the mechanics has affected confidence. Confidence in transaction speed in Bitcoin has deteriorated significantly in recent months. As Bitcoin Cash enjoys much faster transaction speeds, we have started to see a recycling of positions out of Bitcoin into Bitcoin Cash as a consequence.”
Bitcoin Cash was initiated by way of a “fork” which splits the blockchain record, creating a completely new network. The incentive behind developers jumping ship to the new coin is that it allows for larger “blocks” to be processed, which makes the network much faster.
While the new SegWit2x upgrade had intentions of speeding up the original blockchain, many developers originally backed it and then began falling off close to its deadline. The hard fork also posed the risk of the network being split again, thus creating more competition.
An Analyst from the trading platform eToro, said, “After the 2x hard fork was called off, BCH is now being seen as a favorite to one day replace BTC. If the community doesn’t come to a consensus about how to scale the network soon, it may run into congestion, in which case people will need an alternative.”
As developers scramble to come up with a reasonable solution to their slow network problem, Bitcoin Cash continues to rise. It seems some traders have jumped ship because, in just the last 24 hours alone, the off-shoot currency’s price has risen over 35% at $855.43.
However, the original cryptocurrency has bounced back from adversity in the past, the digital currency’s price is up seven times what it was at the beginning of 2017. By the end of this year, the world’s largest futures exchange, CME, is launching Bitcoin futures, another positive step in the longevity of the cryptocurrency.
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