While it would probably be a stretch to say that the Bitcoin Cash hard fork on November 15 caused the most recent and significant drop in the value of the entire cryptocurrency market, there are some big coincidences, especially with timing.
The fork itself built up into a real crescendo of ugliness as two important figure heads in Bitcoin Cash butted heads. Roger Ver and Craig Wright turned what should have been a routine upgrade of the Bitcoin Cash blockchain into a real philosophical fight that spilled out onto the public forum.
This has led many to criticise the actions of the two men who essentially started a hash war in order to gain superiority for their planned blockchains, and to this end, prominent cryptocurrency figures have spoken out.
Barry Silbert, the man behind crypto-centric conglomerate Digital Currency Group (DCG), has come out and called the Bitcoin Cash hard fork a ‘disservice to the industry’, and going beyond it being a catalyst for the price drop, he is probably right for other reasons.
The Bitcoin Cash war is still technically ongoing, as the two chains that forked have refused to die down. Ver and his Bitcoin ABC chain have retained the name Bitcoin Cash, while Wright has formed a new cryptocurrency called Bitcoin SV.
“The fork is a distraction. The industry did itself a real disservice, but let me give you the other side of that — if Bitcoin emerges as the winner, it will have been battle-tested, as it has been challenged by competitive cryptocurrencies and internal development strife,” Silbert explained.
Looking deeper at the negative effect this battle between two large personalities has had, one can also see that the perception of the cryptocurrency space is damaged from this fracas. The fact that two men can wield so much power and influence, as well as capital, and cause such bad blood does not look good for those outside of the cryptocurrency space.
The likes of the SEC and other regulators have insinuated that there will be no future for cryptocurrencies unless they can sort out issues of market manipulation and such, and while this is not market manipulation, it is still too fast and loose for most regulators to accept and agree with.
More to it
Silbert, although not a fan of the BCH fork, is not tying it totally to the reason for the latest drop in the value of the cryptocurrency market. Instead, the DCG chief believes that the unraveling ICO market, as well as the fall in stocks, is correlated to the fall.
The ICO market no doubt was one of the major reasons for the explosion in the price of Bitcoin at the back end of 2017. Now, with ICOs almost fading to nothing, it cannot be too hard to expect there to be a fall back towards the norm that was devoid of the ICO hype.
More so, Silbert has also explained that crypto’s largest investors are funds/groups with asymmetric risk appetites. These funds often hold positions in high-risk, often-tumultuous technology stocks, coupled with cryptocurrency holdings. So, seeing that lines that can be drawn between the recent sell-offs seen in equities and crypto, it is apparent that the macro market has been proding Bitcoin investors.
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