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Bitcoin fell more than 10% Wednesday, falling below $ 6,000 and reaching new lows for the year. The value of other competitors also fell sharply, with market players suggesting that an imminent split in a separate digital currency, called Bitcoin Cash, has caused widespread decline.
One of the concerns is that the division, known as fork, would weaken Bitcoin Cash and his successor. Bitcoin Cash, an emanation of bitcoin, launched in August 2017; it has dropped nearly 90% since the peak of last year.
Andy Bromberg, co-founder and chairman of CoinList, a digital token registration platform, said the prospect of big investors selling bitcoin to hedge the downside risks of their holdings in Bitcoin Cash had played a role in the sale of the market.
"A single event, such as a range, can be an important factor in larger cryptography markets due to their relative immaturity," said Bromberg. "Large cardholders often trade on multiple pieces, which has repercussions beyond the asset that caused the movement."
In an original documentary on WSJ, markets journalist Steven Russolillo travels to Japan and Hong Kong to explore the universe of crypto-currencies. Its mission: to create WSJCoin, a virtual token for the press industry. Picture: Crystal Tai. Video: Clément Bürge
After the 2017 maniac rally and this year's steep drop, the cryptocurrency markets have been exceptionally quiet in recent months, as more traditional assets have resumed more and more. A measure of Bitcoin's volatility last week fell to its lowest point since December 2016.
But then the calm ended abruptly. Bitcoin recently dropped to $ 5,390.12, according to the CoinDesk search site, its lowest level since October 2017. It has traded around $ 6,500 for most of the past few months.
Bitcoin has lost more than 60% of its value this year and is trading well below the record of nearly $ 20,000 announced last year.
A version of Bitcoin Cash is backed by Craig Wright, a controversial Australian businessman who claimed to be the creator of bitcoin Satoshi Nakamoto but failed to convince most people in the industry. The other is supported by Bitmain Technologies Ltd., the Chinese mining giant who filed the request for public announcement in late September, and by Roger Ver, a known investor in the community under the name "Bitcoin Jesus".
Bitcoin has lost more than 60% of its value this year.
Photo:
dado ruvic / Reuters
Bitmain's co-founder, Jihan Wu, was a strong supporter of Bitcoin Cash technology, saying it would solve problems, including transaction speed, that prevented bitcoin from becoming a traditional payment tool. But analysts said Bitmain's large stake in Bitcoin Cash could be a handicap, especially because of the drastic drop in its value.
"The highly controversial split of Bitcoin Cash and the support of huge players in the mining sector, as well as the uncertain position of all clear stakeholders, have dramatically disrupted the market," said Angel Versetti, Co-Founder and Managing Director of the company. 39, Ambrosus firm up.
Write to Steven Russolillo at [email protected]
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