The price of Bitcoin began to display signs of stability on Tuesday after a massive drop that erased 29%, or $38 billion, from Bitcoin’s total market value. The virtual currency began recovering yesterday as traders worried that the quick and sharp decline may have been an excessive response to the cancellation of a long-awaited technical Segwit2X upgrade.
Bitcoin was seen moving near $6,400 today after falling from $7,838 on Wednesday to $5,580 on Sunday. The price crash happened as investors rushed to move their capital to other rival virtual currencies. One such rival is Bitcoin Cash, which split from the original Bitcoin back in August, has climbed about 19% since Friday.
The crash followed the cancellation of an upgrade that would have increased the size of each block on Bitcoin’s blockchain network. A bigger block size allows more transactions to be carried out at the same time, which reduces transaction fees and increases speed.
A similar upgrade has already been incorporated into Bitcoin Cash, which gave the alternative cryptocurrency popularity and strength following its lunch. Meanwhile, the upgrade to the Bitcoin network was called off after an important faction of the cryptocurrency community withdrew its support. The sudden upgrade cancellation resulted in strong volatility and extreme price movement even by Bitcoin’s standards.
Bitcoin investors now are left with two choices. The first choice is to stick to the original Bitcoin, which uses SegWit technology to move unessential data off the underlying blockchain. The second choice is to move to Bitcoin Cash, which uses a block size that is eight times bigger than the original Bitcoin. The choice many investors appear to be making today is the first.
Bitcoin’s price was quick to recover over 13%, or $10 billion, during yesterday’s trading. Bitcoin’s total market capitalization currently stands at $102 billion, which makes it hard for investors and fund managers to resist the digital asset. Demand for the currency remained high following regulatory moves and increased investment accessibility, like CME Group’s recent plans to offer Bitcoin futures contracts.
BTC/USD is trading at 6398, down 1.26%. Bitcoin Cash is trading at 1331, up 15.15% as of 13:20 GMT today.
This post was originally published by EarnForex
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