If you are involved in the cryptocurrency world, you probably saw some major ups and downs for Bitcoin this week. First we saw a major increase of about $2,000 in Bitcoin’s value, reaching almost $7,600 in just two weeks, then we saw a major dip. Hitting a low of almost $5,600. So what happened these last few weeks? What made Bitcoin fluctuate by $2,000? Do you know the answer? If not, don’t worry because we’ve got you covered.
If you’ve been following our blog for some time now, you might have read one of our previous blogs titled, “What is Bitcoin2X and How Will it Impact You?”. Here we talked all about the upcoming hard fork that was supposed to happen around November 16th.The hard fork was supposed to create a new asset called Bitcoin2X.
Bitcoin2X was created to improve the speed and cost of Bitcoin transactions. The current issue with Bitcoin is that each block on the blockchain system contains only 1MB. This limits the amount of transactions that can take place. The problem with this is that, as Bitcoin continues to grow, it won’t be able to scale. Meaning you can’t get any more transactions per block. So SegWit2X (Bitcoin2X) was planning on doubling the size of each block to 2MB allowing more transactions to take place on each block. The hope was that with more transactions taking place, the value of Bitcoin would grow.
As the date of the hard fork was fast approaching, Bitcoin’s value skyrocketed. Going from $5,800 up to $7,500 in only one week. Then on November 8th, SegWit2X announced that they were canceling the fork. As a result, the value of Bitcoin plummeted about 29 percent from its record high.
Another reason for Bitcoin’s price volatility is that investors are switching to alternatives coins. Bitcoin Cash for instance has more than doubled in the same time. This is because Bitcoin Cash offers the upgrades that Bitcoin doesn’t.
This isn’t the first time that we have seen Bitcoin drop that significantly. We have seen major dips in July and September of this year. But when these dips occur, we then begin to see more investors jump in to experience the new asset.
Bitcoin has had an impressive surge of growth this year but Bitcoin Cash was also gaining popularity because its block size is much larger. Because of this, Bitcoin Cash makes transactions cheaper and faster than the original. And when the plans were canceled to increase Bitcoin’s block size, supporters of bigger blocks moved towards Bitcoin Cash.
As a result of the cancellation of the upgrade, users of Bitcoin are left to choose between the original Bitcoin or Bitcoin Cash.
Bitcoin Cash has been around for quite some time now and it hasn’t seen a lot of support since it started. But now that the upgrade to Bitcoin has been canceled, users and business that use the cryptocurrency mostly as a payment method are expected to turn to Bitcoin Cash instead.
Some people believe that SegWit2X was never going to fork from the beginning. The thought is that they used their idea, of helping Bitcoin become more scalable, to dramatically increase the value of Bitcoin overnight. And as the fork date grew closer, you can see just that. The value did shoot up. People speculate that SegWit2X might have manipulated the market intentionally and was never going to execute what they said they were going to do. Then, when SegWit2X announced that they were no longer going to fork, the value of Bitcoin dramatically dropped back down.
The worry with Bitcoin is still surrounding the issue of scalability. Many people who have invested in Bitcoin know that as more people get involved, more transactions will take place, and with more transactions taking place, you’ll need to increase the speed of it all. And right now people don’t think Bitcoin will be fast enough to handle it all. That is why people are moving over to other currencies such as Bitcoin Cash or other ones that can process more at a higher speed.
With all of this going on within the past two weeks, there has been a little bit of panic going on. But people need not worry about what’s going on. They just need to hold on to their coins and see how things play out. Bitcoin is still on the rise. Use your best judgement and start making some small investments. Do only what you are comfortable with. It’s a good time to get involved.
We hope this helped answer any questions you had about the past events in the cryptocurrency space. If you’re still learning about Bitcoin or other cryptocurrencies and want to learn more, check out our other blogs that explain other hot topics that are happening now in the cryptocurrency world.