How fake Satoshi bitcoin rolls down to $ 5500

How fake Satoshi bitcoin rolls down to $ 5500

The altercation of Bitcoin Cash partners turned an ordinary cryptocurrency division into an exciting detective story.

After almost two months of stability around $ 6,400, the rate of Bitcoin on November 14 fell sharply to $ 5,500. What caused and how will cryptocurrencies behave in the future?

Partner of consulting company EY Yuri Gedgafov recalls that there are always a lot of factors on the crypto market, but fears of the war for miners between Bitcoin Cash and the new fork (option) of this cryptocurrency network Bitcoin Cash SV played a major role in the war. “This struggle creates risks for the ecosystem as a whole, in particular, there are fears that one of the parties will seize 51% of the computing power and thus gain control over the cryptocurrency,” the expert says.

True causes

A possible Bitcoin Cash fork will take place on November 15th. Usually, all users of a cryptocurrency network participate in this process, but this time they will have to choose between two warring parties.

The head of the Russian office of Bitfury, Dmitry Ufaev, described Forbes the current situation, which led to the separation of Bitcoin Cash. According to him, the struggle began between partners for Bitcoin Cash (BCH) - Jihan Wu, Roger Wehr and Craig Wright.

Craig Wright is known for trying to impersonate himself as the creator of Bitcoin Satoshi Nakamoto, but was publicly called a liar by the creator of Ethereum Vitalik Buterin. Ufaev recalls that Wright publicly quarreled with his partners, believing that they were not on the right path and created the Bitcoin SV fork (Satoshi Vision).

Taking advantage of Jihan Wu’s Bitcoin Cash partner’s financial difficulties at his Bitmain company (launches mining devices), Wright publicly promised to drown Bitcoin Cash and even bought mining capacities that allow a “51% attack” (while controlling such a share of computing power, their owner may dispose of transactions in the blockchain network at its discretion).

Ufaev believes that each side needs money for the war, and the players of the cryptographic market keep their savings mainly in Bitcoin, so they apparently sold part of the assets. These are significant amounts that have affected the course.

“I think that one of the founders of Bitcoin Cash will“ die ”or suffer greatly, but this will not affect the entire industry. For example, Craig is a strong mathematician, for sure, he calculated everything well, but he is not very balanced, it can prevent him, ”Ufaev predicts the future of cryptoindustry.

The media, referring to sources in the market, previously reported that Bitmain made a large order for miners at the peak of HYIP around cryptocurrencies. At one time, Bitcoin Cash was considered a real competitor to Bitcoin and ranked second in terms of capitalization among cryptocurrencies. However, after the collapse of cryptocurrencies, Bitmain mining devices began to sell poorly for it - according to TechCrunch, the company ended the second quarter of 2018 with a loss of about $ 400 million. Problems with financial indicators reduced Bitmain's chances of a successful IPO. In 2019, it was planned that the company would be able to enter the stock exchange, having received a capitalization of several billion dollars - this would be the most successful example for the cryptoindustry. Information about the difficult financial situation in Bitmain, co-owned by Wu, is quite consistent with the reason why Craig Wright decided to strike another asset of the former partner right now.

Dry facts

Artem Tolkachev, director general of blockchain integrator Sputnik DLT, notes: “There have been no fundamental factors that could act as a catalyst for significant changes over the past few weeks.” To external factors affecting the rate of cryptocurrency, he took prohibitive legislation, significant innovations in technology, as well as major hacker attacks.

At the same time, Tolkachev admits that the accumulated expectations could play a role, however, he reminds that the rate fell by about 10%, earlier it was a normal value for daily fluctuations in the rate, and such long stability was an exception. He added that the control points (after which the course of Bitcoin can change dramatically) for Bitcoin is $ 3000 from the bottom and $ 7000 from the top, but they are still far away.

Vladimir Smerkis, the co-founder and partner of Tokenbox, recalled that although there had been no new legislative restrictions, the media reported that several large mining farms in China were disconnected due to state inspections. Electricity prices in China are subsidized, and mining farms are a large consumer, therefore they are under control. These messages came out simultaneously with the fall in computing power of the Bitcoin cryptocurrency network.

Smerkis noted that from the point of view of technical analysis, the support level in the region of $ 6,000 was broken, which was held for almost the entire 2018: “Of course, this led to the triggering of stop orders and panic sales. For example, on the Bitstamp exchange (trading in a pair to $), at the time of the panic, applications for the purchase of 100 Bitcoins (more than $ 500,000) were completed in just a few seconds. ”

In general, experts agree that a key quarrel between the Bitcoin Cash partners had a key influence on the rate change, but it will not affect the future of Bitcoin and the rest of the cryptocurrencies.