- The price of bitcoin, the red-hot digital coin, was trading down 7.19% on Friday afternoon at $6,618 a coin.
- That’s down from more than $1,000 from peak near $7,900 a coin, which it hit after news broke that a potential fork in the network lost support from backers.
- Bitcoin cash soared to an all-time right of $1,009 per coin.
Bitcoin has shed over $1,000 over the past 48 hours.
Meanwhile, bitcoin cash reached an all-time high of $1,009 per coin Friday afternoon, according to data from Markets Insider.
Experts think bitcoin’s crash and bitcoin cash’s rise are related to the same thing: an upgrade to bitcoin’s network being called off.
Backers of the so-called Segwit2x proposal were considering to split from bitcoin’s main blockchain network, but power-brokers behind the plan called off their support for the upgrade on Wednesday. That means the network will remain intact — at least for now. Initially, the news sent bitcoin up near $7,900 per coin.
But by Friday afternoon, the red-hot cryptocurrency was trading down 7.19% at at $6,812 at 2:40 p.m. ET, according to data from Markets Insider.
Segwit2x would have increased the size of the blocks underpinning the bitcoin blockchain network, which would have enabled it to potentially process more transactions. Backers thought the plan would help the digital currency scale faster.
A fork in the network would have doubled the number of coins some investors owned. Just as it did when bitcoin cash split from the main bitcoin network in August.
Tor Bair, head of growth for Enigma, told Business Insider in an emailed statement, that folks who bumped up their holdings in anticipation of the fork might be reducing their position in bitcoin. Hence, the sell-off.
“Some traders may have been attempting a ‘dividend play’ on the Segwit2X fork and purchasing bitcoin in anticipation,” Blair said. “With the fork called off, these speculators are now reducing their positions.”
Another expert told Business Insider backers of the Segwit2x upgrade might be switching over from bitcoin to bitcoin cash, which similarly to Segwit2x has the potential to process more transactions.
“When you look at the trends, it does look like many Segwit2x supporters have switched to bitcoin cash. The forked currency has seen a 35% increase in a matter of days,” Abhishek Pitti, CEO of Nucleus Vision, said in a statement.