EMERGING TECH
EMERGING TECH
EMERGING TECH
Bitcoin price drops after proposed fork gets canned for lack of support
The price of bitcoin dropped in trading Wednesday after a plan for a proposed fork in the cryptocurrency that would have seen investors credited with an additional bitcoin-related cyptocurrency were dropped thanks to a lack of support.
Called SegWit2x, the proposed fork would have increased the blocksize of bitcoin to allow quicker and less costly transaction processing. But it failed because of a lack of consensus support across the bitcoin community, including from bitcoin miners and exchanges.
Mike Belshe, chief executive office of blockchain startup Bitgo Inc. and one of the key players pushing for the fork, made the announcement in an email, saying that the plan was being suspended due to concerns that it “could divide the community and be a setback” to bitcoin’s growth.
“Our goal has always been a smooth upgrade for bitcoin. Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together,” Belshe wrote in the email. It was co-signed by industry leaders Wences Casares, CEO of Xapo Inc.; Jihan Wu, CEO of Bitmain Technologies Inc.; Jeff Garzik, CEO of Bloq Inc.; Peter Smith, CEO of Blockchain Inc.; and Erik Voorhees, CEO of Shapeshift.io Inc.
Initial reports noted that the price of bitcoin rose following the announcement thanks to claims that it brought stability to the market. But others who were holding bitcoin in hopes of obtaining an additional cryptocurrency post-fork in the form of “Bitcoin 2x” weren’t nearly as pleased.
At least some investors were buying into bitcoin to be on board for the fork, speculating that the new 2x coin would provide returns in a similar way that another forked version called Bitcoin Cash did in August. Now that the fork is not happening, those same investors are selling their bitcoin holdings.
The Register attributed the subsequent price decline to profit-taking, but the notable difference is that since the announcement was made, major alternative cryptocurrencies have all seen price increases. Ethereum rose as high as 10 percent at one point, Ripple up 5 percent, Monero 14 percent, NEO 18 percent and others also seeing increases — all likely because those holding bitcoin for the purposes of the fork have sought to diversify their portfolios in other ways.
The price of bitcoin dropped from $7848.31 to as low as $7114.26 after news of the announcement spread before settling at $7,423.99 as of 9:30 p.m. EST.
Photo: btckeychain/Flickr
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