Week in Review: Crypto Carnage Intensifies; Bitcoin Cash ABC Retains BCH Ticker Symbol
Cryptocurrency prices sold off anew this week, as bitcoin and the altcoin universe crashed to lows not seen since September 2017. The hash war over bitcoin cash continued despite an early lopsided victory for the ABC chain, which retained the BCH ticker symbol on major exchanges. Calvin Ayre, one of the biggest proponents of the competing bitcoin cash SV chain, acknowledged that the opposing side cheated its way to victory and proposed a mechanism by which the war can be resolved peacefully.
Volatility in traditional markets intensified this week, as U.S. stocks turned negative for the year and oil prices crashed to new yearly lows.
Cryptocurrencies Continue to Bleed
The combined value of all cryptocurrencies in circulation bottomed near $136 billion on Friday, having declined a staggering $48 billion over the course of the week and $73 billion since Nov. 12, when the downturn began.
With the exception of USDT and TUSD, two dollar-backed stablecoins, all major cryptocurrencies in the top-30 recorded doubled-digit percentage losses over the past week. Bitcoin’s price plunged more than 22% to reach a low below $4,100 on Bitstamp Friday. Bitcoin cash lost roughly half its value and briefly traded below $200 for the first time in its history.
Ethereum sold off more than 31%; Stellar XLM lost 25%. EOS, Litecoin and Cardano were each down more than 22%. XRP managed to outperform the market but still lost 13% of its value over the seven-day period.
Hard Fork Matters
The hash war between bitcoin cash ABC and the competing SV chain intensified this week, though most major exchanges recognized the former as being the primary implementation for the BCH upgrade. As such, bitcoin cash ABC has retained the BCH ticker symbol, with CoinMarketCap integrating both data streams in its calculation of aggregate prices and overall market valuation.
CoinGeek founder and casino mogul Calvin Ayre released a statement on his website acknowledging that bitcoin cash ABC had won the hash war, but did so only by cheating. In his view, the SV chain would have prevailed had bitcoin.com not diverted its entire mining pool to mining BCH. As Hacked previously reported, bitcoin.com put a freeze on its BTC operations to free up capacity to mine BCH exclusively.
Although Ayre believes the hard fork is permanent, he said a prolonged war could be averted if both sides abandon the BCH label. In his view, bitcoin cash has already been replaced by ABC and SV.
Kraken CEO Jesse Powell said the biggest issue behind bitcoin SV are the “grandiose personalities” that have fractured the BCH community. In a Wednesday tweet, he issued the following statement:
“Never had anything against Calvin Ayre but this approach is anathema to the community you hope to have adopt your technology. The merits of BSV are overshadowed by the alienating threats of a few grandiose personalities. Longer chain != adoption. Victory may be pyrrhic.”
Kraken was one of a handful of exchanges that came out in support of bitcoin cash ABC.
Stocks, Oil Plunge
U.S. stocks declined sharply in the first half of the week, as a selloff in the technology sector drove the S&P 500 and Dow Jones Industrial Average into negative territory for the year. The tech rollover was later accompanied by a sharp drop in energy stocks, as oil prices resumed their months-long correction. As of Friday, both the S&P 500 and Dow were down more than 1% for the year.
The rout in oil prices intensified Friday, as investors turned their attention to an upcoming summit of the Organization of Petroleum Exporting Countries (OPEC). U.S. crude futures plunged to a low of $50.60 a barrel on Friday, marking the second time this week that prices fell more than 7%. Brent crashed to a low near $59 a barrel. Both contracts were trading at their lowest levels in over a year.
While OPEC is widely expected to announce new output cuts next month, it might not be enough to account for the anticipated drop in demand in 2019 and beyond. A slowdown in global economic growth is expected to limit crude consumption for the foreseeable future.
The Week Ahead
The crypto downturn shows no signs of relenting anytime soon, which means further losses are likely in the near term. Bitcoin tested the $4,000 support on Friday, which suggests the bears are firmly in control. This is further highlighted by the upsurge in futures trading over the past two weeks.
While the downturn has been severe, bitcoin has grown accustomed to large value swings during its brief history. This may be somewhat surprising to new traders, especially those who entered the market during one of the leas volatile periods in bitcoin’s history. As Hacked recently reported, bitcoins nearly 80% collapse is the fifth worst stretching back to 2011.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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