The bitcoin price continued to decline on Friday in the wake of SegWit2x’s indefinite suspension, reducing the leading cryptocurrency’s value below the $7,000 mark. The bitcoin cash price, meanwhile, surged more than 30% in the days leading up to its hard fork, with proponents declaring that it will claim the rights to the “Bitcoin” brand within six months.
Despite bitcoin cash’s surge, the total cryptocurrency market cap posted a net decline of more than $7 billion, falling from $206.3 billion on Thursday to a present mark of $199.2 billion.
The bitcoin price posted a significant decline for the second consecutive day, falling more than 5% to $6,795. This leaves bitcoin with a total valuation of $113.3 billion and a 57% share of the total crypto market cap.
The primary theory for the pullback continues to be that traders had priced in the value of the “free” coins that would have been airdropped when the SegWit2x hard fork was activated — an event that was called off at the last minute by its leading advocates.
Moreover, while the suspension of the hard fork brought relief to many corners of the community, the fact is that canceling SegWit2x does not solve the cryptocurrency’s problems: bitcoin still needs to scale. Until those solutions are implemented — whether on-chain or off-chain — rising transaction fees will continue to be a problem for the burgeoning network.
Bitcoin’s retreat had initially appeared to be a prime opportunity for ethereum to begin regaining some of the tremendous ground it had lost to the flagship cryptocurrency during the past several months. Yesterday, the ethereum price climbed past $325, the culmination of a seven-day double-digit rally. However, the ethereum price reversed course on Friday and began to sink back down toward $300 — a mark that has exerted an intense magnetic pull on ethereum in recent weeks. At present, the ethereum price is $306, which translates into a $29.3 billion market cap.
With bitcoin and ethereum both hamstrung, bitcoin cash has initiated an astonishing rally. In the past day alone, the bitcoin cash price has risen by almost 32%, from $629 to $826. This launched bitcoin cash’s market cap to $13.9 billion, and the bitcoin cash price is now less than $100 below the all-time high it set in mid-August.
The impetus for the rally appears to stem from the failure of SegWit2x to activate on the main bitcoin network. Rightly or wrongly, bitcoin cash advocates believe that bitcoin’s objection to on-chain scaling will prove to be its undoing, and they believe that their cryptocurrency will fill the void. Indeed, Bitcoin Classic developer Tom Zander announced yesterday that he was shuttering the software project — which had moved to bitcoin cash following the August hard fork — declaring that the failure of SegWit2x was the nail in the coffin for bitcoin and that Classic was no longer necessary. “In at most 6 months I’m sure we’ll just drop the “Cash” and call it “Bitcoin,” he wrote.
Bitcoin cash’s surge caused this week’s widespread altcoin rally to stall, and few other top-tier coins were able to gain ground against the value of the dollar.
The ripple price declined 4%, reducing its market cap to just over $8 billion. Litecoin dipped by 3% but nevertheless managed to hold above $60. The dash price limited its skid to 1% and is currently trading near $326. NEO and monero each dropped by more than 8%. NEM and Ethereum classic, on the other hand, joined bitcoin cash in its rally, with each posting gains of 3%.
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Last modified: May 21, 2020 9:07 AM UTC