The emergence of bitcoin gold as a third bitcoin currency – a result of the October 24 fork, has led market watchers to once again wonder whether a remarkable year for the first-born currency, bitcoin classic (BTC) has come to a screeching halt. The bitcoin price fall that followed the fork, shook some investors and took the shine off an otherwise fascinating year. BTC has shattered price ceilings consistently throughout 2017, not in a straight line, but gradually. In mid-October, it flirted with the $6,000 level.
Throughout 2017, BTC has weathered dismissive comments from naysaying billionaire investors and reluctant government regulators. It survived the August fork and the birth of bitcoin cash (BCC). The resultant confusion surrounding the availability of BCC, which was supposed to deliver each BTC holder a duplicate purse of BCC coins, ran into trouble, especially when major exchanges like Coinbase refused to honor the split. Coinbase eventually relented, but has not yet made this duplicate bounty available to its customers.
Following a quick dip, the post August-fork BTC continued to climb, buoyed by a pervasive brand loyalty and helped perhaps a little by the immediate plunge in BCC prices.
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A similar reaction seems to be happening in the hours following the October 24 fork. After a brief price fall, BTC seems to be rebounding, while BTG suffers. The drop in bitcoin gold price can be attributed in part of a hack attack on its website, which never helps to establish much needed credibility.
Some analysts see this as the end of the party for BTC. Coindesk.com, for example, suggests that “the short-term outlook remains murky, courtesy of the bearish price relative strength index (RSI) and price money flow index (MFI) divergence. It suggests that a disappointing end-of-day close would “add credence to bearish divergence, confirm the rally from the September low of $2,980 has topped out, and open doors for a drop $4,500 levels.”
This may indeed be the case, but similar words have been spoken before, all the while BTC has continued its climb.
While analysts focus on the numbers, there may be some human aspects to consider.
First of all, BTC has a powerful brand appeal. Although this is no guarantee of permanent rock-solid value, its presence as the first-to-market cryptocurrency that everyone knows means it remains the one to beat. This, despite the absence of any corporate face, and despite the many famous breaches and losses that have occurred throughout its short life. Ether, the currency carved out of the blockchain platform Ethereum, may have a greater long-term chance at market domination, and may actually make the most sense as a practical tool of commerce, but for the moment, everyone knows and loves bitcoin. It’s a human comfort thing.
Market analysts may be right. Corrections happen. It happened recently with Ethereum, and will happen again as over-enthusiastic markets cool down for a moment and return their currencies back to more realistic levels. But it is human nature to pick the momentum up again, as eager investors jump back on the bandwagon. The current bitcoin price fall will likely remain a temporary dip.
The other human element to be addressed is the potential for currencies like bitcoin gold to gain traction. The forks that gave rise to “gold” and “cash” each came from forks that sought a better way to mine and maintain the currency. These may prove to be of sufficient value, both emotionally and practically for investors to tip the scales in their favor and grow at least one of these post-fork currencies into a more stable player.
Of course, no one has the answer. If all the billionaires were on one side of the argument, it would be possible to agree that a.) cryptocurrency is the future, or b.) cryptocurrency is a bubble, depending on which side they all sit. But in truth, their differences of opinion range across the spectrum, with many pointing towards prices for BTC reaching $10,000 or more sooner than later.
The forks, the currencies and the tokens are all part of a much larger revolution in commerce, finance and economics that is happening around the world. While certain countries take their time to assess the viability and legality of cryptocurrencies and ICOs, other areas of the world like Dubai, are pushing the business world into a pace where smart cities, smart currencies and smart contracts are the norm rather than a quaint idea.
As for BTC, it will likely take more than another cub in the den to push it away from its top spot as the cryptocurrency to beat. This particular bitcoin price fall won’t be the last, but nor will it be the end.