Weekend News: Steep Fall of Bitcoin and Record High of Bitcoin Cash

Published on 13 Nov. 2017
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During the weekend, the price of Bitcoin showed extreme volatility, slumping to $5500/BTC for the first time since October, 25. After reaching the minimum, the cost rallied to $6500/BTC.

The recent decrease in Bitcoin price facilitated the growth of Bitcoin Cash rate, so investors and companies that had supported SegWit2x earlier started to shift to Bitcoin Cash after the fork cancellation.

Thus, at the end of last week the price of Bitcoin Cash started to overgrow rapidly and increased from $600/BCH to about $2000/BCH, displaying the situation with Bitcoin in the inversed manner – it reached the local minimum at that moment. Later on, the price of Bitcoin Cash underwent a significant correction. Right now the price is within $1200/BCH.

As Ted Rogers, the president of Xapo, outspoke on November, 12, the increase of Bitcoin Cash price wasn’t stable since there were no infrastructure, community, and active base of users to support that tendency, even despite the fact that SegWit2x supporters turned to using the given Bitcoin fork.

While Bitcoin Cash became too expensive for investors, Rogers emphasized, that Bitcoin itself became quite cheap in light of its last week’s rate of maximum $7900/BTC – at that moment it traded a bit less than $6500/BTC.

As Rogers had expected, the traders started to buy at a minimum, so the price of Bitcoin restored in a relatively short time. But the question remains whether Bitcoin will start the rapid growth to reach its all-time maximum of $7900/BTC.

There are several important events which should be taken into account when estimating the medium-term productivity of Bitcoin. Earlier, Simon Dixon - a co-founder and CEO of BnkToTheFuture, stated that the price of Bitcoin would likely to grow within weeks because of the institutional and retail investors, who would enter Bitcoin market through the strictly scheduled cryptocurrency and derivatives futures.

CME Group and CBOE, two biggest world options, together with LedgerX, will start to use futures and derived financial instruments for Bitcoin, oriented on the institutional investors, to the end of 2017. At the beginning of this month, the Head of CME Leo Melamed noted that more and more hedge funds, investors, and investment companies started to regard Bitcoin as a new type of assets rather than a digital currency only.

If the supporters of SegWit2x from the initial agreement NYA/SegWit2x continue to support Bitcoin Cash and build infrastructure around it, it is likely that Bitcoin Cash will co-exist with Bitcoin as a leader of the cryptocurrency market. One should mention that the capitalization of Bitcoin Cash exceeded the capitalization of Ethereum when it reached its record high during the weekend. In other words, for some time it took the second place in the cryptocurrency top at Coinmarketcap.

As stated a Bitcoin expert Andreas Antonopoulos, these two cryptocurrencies can co-exist just like Bitcoin and Ethereum during the last two years, despite the fact that they work with contrast philosophies, visions, and strategies.

Even with the increase of Bitcoin Cash support and the growth of its rate, the mass entrance of retail investors to the Bitcoin market will probably cause a quick extension of demand on Bitcoin as valuable assets and safe-haven assets. Consequently, it will lead to the new maximums in the medium-term perspective.

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