Everyone knows that this year has been tough for Bitcoin and the cryptocurrency market as a whole. The bears have taken full control of the market despite several bullish attempts to break out of the trend. A few weeks ago, Bitcoin was commended for low volatility but the bears quickly showed up and pushed the price down by 11% within a 24 hour period. This marked one of the most intense sell-offs in the market this year.
Bitcoin (BTC) Is Not Going To Decline Indefinitely
During Fast Money on CNBC, Brian Kelly, the CEO and co-founder of BKCM, said that the bearish pressure on BTC and the market as a whole is not going to last forever. In fact, he said that the current price decline was caused because of the ongoing dispute in the Bitcoin Cash community. The ongoing civil war is between the proponents of the Bitcoin Cash development team. One camp is in support of the Bitcoin ABC protocol while the other camp is supporting Bitcoin SV. During the seat down, Kelly said:
“Bitcoin reached its lowest volatility in history and this made investors confident that the market was maturing into a new age. Unfortunately, things suddenly exploded just as the war within the Bitcoin Cash community intensified. During a hardfork, there is supposed to be consensus in the community. Unfortunately, this isn’t the case for the BCH hard fork. This may just look like a BCH civil war but I can assure you that it is affecting the entire cryptocurrency community”.
Why Is The BCH Civil War Affecting The Entire Cryptocurrency Market?
The civil within the Bitcoin Cash community started like a minor disagreement. All of a sudden, it started affecting the entire market. The Bitcoin SV camp converted a simple disagreement into a competition for hash power. Led by Calvin Ayre and CoinGeek, the SV camp threatened to engage 51% of the hash power on the network. This would give the Bitcoin SV camp the power to manipulate blocks on the BCH network.
Bitcoin (BTC) Price Today – BTC / USD
Over the years, Jihan Wu, the CEO of Bitmain has significantly influence the cryptocurrency community in China. Using his power as the largest mining pool operator in the world, he can decide to focus his hash power on BCH to fight against Calvin Ayre who is being backed by CoinGeek. If this happens, the BTC hash rate will drop significant short-term and this would have a catastrophic effect on the network.
Unless a consensus is reached soon, the entire cryptocurrency market will suffer. This is because things that affect Bitcoin and Bitcoin Cash tend to have a ripple effect on other coins in the market. Kelly continued:
“Members of the cryptocurrency community are worried that the BTC and BCH markets might become slow. Some are worried that the upgrade may not go through while others are worried that if the network upgrade happens successfully, we might have a whole new kind of problem to deal with. This triggered a chain reaction that led short-term investors to sell their coins. The major sell-off is what is reflected on the price of Bitcoin and other cryptocurrencies. When the market settles, things would get better”.
Even as everyone waits for a price correction to kick in, the total market capitalization for all cryptocurrencies may remain around $180 billion for a while.