Bitcoin has traded in a tight range today, as the market’s ‘animal spirits’ calmed down somewhat. As traders digest the news about the suspension of the Segwit2x hard fork, some of the latest developments are posing more questions than answers.
A couple of hours ago, a group calling itself Bitpico posted a statement on the Bitcoin Segwit2x board: “We are carrying out the fork regardless as everything is set in motion.”
“Backing down the difficulty right now is a strategy. Wonder why 30% network hash-rate disappeared? It’s ours; the miners that will continue what is set in motion… A handful of humans cannot stop what they have no control over..,” the statement concludes.
A touch more than full 24 hours after the event we may yet be at a crossroad for the leading crypto-currency. We might add that the price action since last night’s sudden announcement that the Segwit2x Bitcoin fork is suspended, confirms that something is going on…
The March of the Altcoins
It all started several months ago in the run-up to the birth of Bitcoin Cash. As the event was nearing and as ICOs were becoming more and more popular, Ethereum and a list of several smaller altcoins including Ripple and Dash among others went through the roof. Shattering the boldest expectations of those who have purchased altcoins at the start of the year, Ethereum & Co as I will call them here, have eaten into the market share of Bitcoin.
This continued up until about the middle of June when the Bitcoin domination metric has reached a low of just below 38 percent or thereabouts (thanks for the nice charts, Coinmarketcap!).
Since then and in the run-up to the Bitcoin Cash birth, the oldest cryptocurrency out there has been slowly regaining its dominance.
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The Return of King Bitcoin
The Chinese ban that wreaked havoc across cryptocurrency markets in the beginning of September has been quite dramatic. The main takeaway from the event was that a number of fiat money market participants left the market. This is something that we can see from the USD market cap chart (again courtesy of Coinmarketcap).
The market got spooked and since the 1st of September, when Bitcoin dominance was about 45 percent, it rose back to a whopping 62 percent. We can speculate that the reason for the move is Chinese interest that not only consolidated onto Japanese exchanges, increasing JPY transactions to over 60% of the total, but also focusing demand onto the one coin to rule them all.
Allusions to ‘Lord of the Rings’ aside, the return of the dominance of king Bitcoin was the main driver for its price rise to almost $8000 yesterday. The majority of the move was at the cost of altcoins that have lost market share in recent weeks (more like a couple of months) since the previous peak in USD market cap set in was only surpassed in mid-October, that is about two weeks ago.
Uncertainty is Gone and Back Again
Yesterday we saw a violent price move that was triggered by the announcement from Mike Belshe that the Segwit2x block increase plan that was started in May is postponed. While some market players (or Bitcoin owners) were relieved, others became nervous.
Altcoins are making a killing during the past 24 hours of trading. Ethereum, Bitcoin Cash, Dash, NEM, Monero, IOTA, etc.. Wait, if we look at the chart, 17 out of 18 top cryptocurrencies by market cap have increased in value today! So what is going on with Bitcoin next, you might ask?
Where is the Ring?
After all these lines above, you might want to read that the author of this article is not an owner of Bitcoin at present nor do I want to stir the muddy waters around king Bitcoin… so I don’t care where it goes tomorrow. But the long-term prospects of the dominant cryptocurrency remain a mystery that will be demystified only by readers like you (who merely take the info above with a grain of salt and continue trading based on your conviction).
The Ring of Power is yours and it is up to all of you if you want to make Bitcoin great again (just kidding!)… Be wary, at least for some miners out there (that modestly claim to possess 30 percent of total hash-rate power), increasing the block size is crucial to the long-term applicability and survival of The One (Neo, where art thou?).