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Yesterday Bitcoin price broke its support level of $4000 and dipped to $3600. Today, Bitcoin rose back to its support levels again — between $4100 to $4200 — pumping the entire cryptocurrency market to an all time high at $150 billion.
There has been a lot of noise regarding Bitcoin transactions being delayed and fees getting more expensive, which in turn led to the price drop. This is because Bitcoin is losing ground to Bitcoin Cash in terms of mining power. Making investors think BCH could be the more viable rival of core version.
There is a good chance this will lead to complications with SegWit upgrade and keep incompatibility concerns in play. Bitcoin Cash price, on the other hand, continue to comfortably hover between $650 and $700.
Top stories from the Crypto World
1. Bitcoin Hashrate drops 50% in the last 4 days
Bitcoin users are complaining of slow and expensive transactions as a 50% loss of hashrate (from 8,000 to 4,000 petahash) has brought the network to a standstill. BTC transactions are taking hours or even days to get confirmed.
The pattern is reminiscent of the network congestion of previous months when Bitcoin’s mempool expanded to record highs. This time, however, the delays are due to lack of power in the face of competition from Bitcoin Cash (BCH), which is luring miners with significantly greater rewards.
You should know: Satoshi once said, “Miners will mine the more profitable chain.”
2. Bitcoin’s battle over Segwit2x has officially begun
BitPay, a global bitcoin payment service provider and a supporter of Bitcoin Cash, last week posted a blog asking users to download BTC1. “BTC1,” an alternative software client to Bitcoin Core, the one used by over two-thirds of the network.
In Bitcoin, incompatibility can have economic consequences – namely, the creation of two bitcoin assets, a development that’s still splitting sentiment.
Reacting to the statements Lightning Network creator Tadge Dryja called it “straight up malware,” while Bitcoin Core contributor John Newbery asserted that the post was “dishonest and dangerous.”
3. South Africa’s central bank wary of launching its own cryptocurrency
South Africa’s central bank has said it’s “too risky” for the institution to launch its own cryptocurrency. The deputy governor of the South African Reserve Bank, Francois Groepe, said:
“Virtual currencies have the potential of becoming widely adopted. However, for the central bank to issue virtual currencies or cryptocurrencies in an open system will be too risky for us. This is something we really need to think about.”
Why it matters: In the past few months, Bitcoin adoption rate has skyrocketed in South Africa. Largest Bitcoin exchange in the country, Luno, is seeing unprecedented volumes weeks after weeks. It would be safe to safe SA is going through a paradigm shift on how transactions are done in the country.
At this time statements coming from the central bank with regards to cryptocurrencies are crucial because they indicate the sentiments of the government — that is whether or not regulations that are due to come in the future would be in favor of cryptocurrencies.