Bitcoin seems to be like the victim in a 1980’s slasher movie. It keeps running towards the exit to [generic horror movie location: camp, house, neighborhood] screaming the entire way only to be bifurcated via chainsaw and/or machete right before salvation.
OK maybe that was a metaphor was a little labored, but just this year we have seen bitcoin’s drop and recovery twice after the bitcoin cash and bitcoin gold fork and once just under the fear of a hard fork – Segwit2x – that was slated for the middle of November but was cancelled due to disagreement within the bitcoin community.
This latest bitcoin fork though seems slightly different as certain sources are speaking about 1 bitcoin potentially being turned into 10 bitcoin diamonds. Kind of like if aforementioned slasher movie victim was a Olympic cross-country runner that may spontaneously force mitosis. This could possibly push even more speculative buyers into the fray trying to ride the bitcoin dragon. The groups, known as the Bitcoin Diamond Foundation, of bitcoin miners that are behind the fork proposal seek to increase the capacity of the block and the speed of transaction confirmation.
Since Friday we have seen bitcoin blast through the $9,000 level inching towards $9,600 (indicative price) at the time of writing this article. Yet again this in combination with the proposed fork are making analysts and the general investigentsia (like the intelligentsia but for money. Funny enough some of bitcoin’s price drops weren’t even due to forks.
The crashes bitcoin experienced though weren’t exclusively due to the fear of forks (forkaphobia?) though:
Historical Bitcoin Crashes:
- 71% price drop, in 2013 recovering after seven months, due to a rush of speculative buyers after media coverage.
- After a jump 10 times its April $120 price by November, bitcoin came down to $500 right before Christmas. This was again largely due to speculative bitcoin trading.
- 49% drop in 2014 recovering after 2 years this time due to the now infamous Mt. Gox hack. Mt. Gox was at the time one of the most established bitcoin exchanges.
- 36% drop under speculation of a fork in June 2017 – ironically the actual fork in August that created Bitcoin Cash, didn’t affect the price as much.
- 37% by the middle of September, but just three days later the crypto started recovering pushing through the $4,000 mark towards it pre-price drop price of close to $5,000. The reason for the drop was largely due to China’s regulation of ICO and speculation that China would outright ban cryptocurrencies.
Ultimately when talking about bitcoin and these past crashes, you need to remember that in its most distilled form, taking away the media buzz, investors potshots and moguls hopeful quips about the future – bitcoin is a currency, the more people that actually use it to buy things and the more retailers start adopting it the more its intrinsic
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