Bitcoin prices plummeted by 29 percent from a record high $7,882 last Wednesday, dropping to as low as $5,605 on Monday, according to data by Bloomberg.
A rival cryptocurrency, called Bitcoin Cash, spun off from Bitcoin in August, surged past the $2000 price point reaching close to $2426 on Sunday.
However, at the time of publishing this article, the price of Bitcoin recovered and stood at $6531.24 while the price of Bitcoin Cash slipped further to $1139.66, according to data by Coinmarketcap.com. Further, the market cap for bitcoin rapidly paced to $108 billion.
Media publications suggested that the reason for this dip was when last week, “a group within the Bitcoin community abandoned its push for an update to the cryptocurrency that would ensure faster transaction speeds called ‘Segwit2x’."
Earlier in a suspension statement, SegWit2x lobby led by Mike Belshe, Wences Casares, Jihan Wu, Jeff Garzik, Peter Smith, and Erik Voorhees said,
“Our goal has always been a smooth upgrade for Bitcoin. Although we strongly believe in the need for a larger block size, there is something we believe is even more important: keeping the community together. Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of Segwit2x.”
This drop of the plan essentially meant that there is no solution to help Bitcoin’s scale. A Bloomberg report claims that Bitcoin Cash is gaining popularity owing to ‘its larger block size, a characteristic that makes transactions cheaper and faster than the original.’ Bitcoin Cash is considered to have eight times more data processing on its blockchain.
Mike Kayamori, head of Tokyo-based Quoine, the world’s second most-active bitcoin exchange over the past day, stated to Bloomberg, that supporters of bitcoin’s technology upgrade are now switching support to bitcoin cash. This was because the community was awaiting last week’s technology for the original bitcoin.
Over the course of the year, Bitcoin prices have been extremely volatile. According to Coindesk.com, price of a single Bitcoin stood at $1018.05 on January 2 this year. However, the prices started to see an upward trend in April this year surging to approximately $1443.68 in May.
By mid-August the prices surged to $4425 for one Bitcoin and subsequently rising to almost $7000 by November.
Earlier this month, ETNow reported quoting agencies that to curb the use of cryptocurrencies in India, a government panel is said to have advised closing cryptocurrency dealers in India.
Later this month, responding to an audience query, S Ganesh Kumar, Executive Director of RBI, had stated,
“Our current position on Bitcoin is that we will not be using it for any payments and settlements...though the technology underlying cryptocurrencies will not end."
With, Blockchain refered to the technology above.
In March, the RBI had issued a call of warning against the use of cryptocurrency and virtual currencies. In spite of this warning, in May, ZebPay, a local app-based Bitcoin exchange stated that close to 2500 Indians are investing in Bitcoin daily.
Tarush is driven towards delivering unbiased and accurate reportage while engaging with as many mediums as possible to narrate a fresh perspective. Working for the past few years in the digital space with YourStory, he has covered the Indian technology ecosystem extensively, focusing on new age Fintech companies, while building strong connects within the industry.