Bitcoin, Ethereum Plunge Accelerates As Scaling Deadline Looms
Posted by Tyler Durden on July 16, 2017 3:20 pm
Tags: Albanian central bank, Alternative currencies, Bank of Albania, BITCOIN, BitPay, Blockchains, Business, central bank of Albania, Central Banks, Cryptocurrencies, digital currency, E-commerce, Ethereum, Finance, Financial Supervisory Authority, Financial technology, headlines, Meltdown, MONEY, None, Virtual currency, Volatility
Categories: Albanian central bank Alternative currencies Bank of Albania Bitcoin BitPay Blockchains Business central bank of Albania Central Banks Cryptocurrencies Digital currency E-commerce Economy Ethereum Finance Financial Supervisory Authority Financial technology headlines Meltdown money None Virtual currency Volatility
Yesterday it was Bitcoin, today it is Ethereum that is taking the brunt of selling pressure (down 20%) but the dumping of virtual currencies is evident across the entire crypto space with the biggest market cap coins tumbling to 2-month lows…
Bitcoin traded as low as $1830 early this morning to two-month lows… as one veteran of the cryptocurrency trading space told us, “shit’s getting real, no one is sure what happens after August 1st , so traders are taking profits, squaring positions into the scaling deadline.”
But Ethereum is getting battered today, down 20% overnight to 2-month lows…
While the main driver of this selloff is undoubtedly anxiety over the looming scaling deadline on August 1st, we note that, as CoinTelegraph reports, none other than the Albanian central bank has joined the chorus warning about the dangers to the public of virtual currencies… Bitcoin and other cryptocurrencies have been making headlines around the world, and with the recent sell-off this week, more is sure to be said. Central banks and governments continue to make statements regarding the dangers of digital currencies, or, conversely, extolling their benefits. The most recent bank to issue such a warning is the central bank of Albania. The bank issued a strong statement warning citizens that digital currencies were not under the direct purvey of the country’s banking sector regulations and that such vehicles carried extremely high levels of risk.
The Albanian authorities stated:
“We appeal to the Albanian public to be mature and responsible in the administration of savings or liquidity they possess. One should orient investments toward financial products and instruments offered by institutions licensed and supervised by the Bank of Albania and the Financial Supervisory Authority.”
The anonymity and decentralization provided by Bitcoin made nefarious activity not only possible, but probable, and the bank warned against the clear risks taken by those choosing to invest. Bitcoin enthusiasts would clearly point out that a centralized bank is the very essence of what Bitcoin is seeking to distance itself from, and so a less than glowing review would be expected.
While a general consensus points to the upcoming hard fork probability as the principal motivation for market uncertainty, mainstream media have been quick to sound the alarm about Bitcoin once again.
“Rival factions of computer whizzes who play key roles in Bitcoin’s upkeep are poised to adopt two competing software updates at the end of the month,” Bloomberg reported Friday, announcing Bitcoin could be “nearing a total meltdown.”
“That has raised the possibility that Bitcoin will split in two, an unprecedented event that would send shockwaves through the $41 bln market.”
As areminder, below is an outline of the main events that could unify or divide bitcoin:
By July 21: SegWit2x software is released and supporters begin using it.
July 21 to July 31: The community monitors how many miners deploy SegWit2x:
If more than 80 percent deploy it consistently, that should signal community-wide adoption of SegWit and the avoidance of a split, at least for now.
But if a majority do not deploy, expect anxiety within the community to grow as the focus shifts to the Aug. 1 deadline.
Aug. 1: UASF is deployed by its supporters, who begin checking if bitcoin transactions are compliant with SegWit.
If a majority of miners still do not deploy SegWit2x or otherwise accept SegWit, and if UASF supporters do not back down, then two versions of bitcoin’s blockchain could come into existence: a UASF-backed one where only SegWit transactions are recognized, and another where all trades — SegWit and non-SegWit — are recognized.
If a split occurs, bitcoin will likely begin existing on both blockchains in parallel, resulting in two versions of the cryptocurrency. Expect traders to quickly re-price the value of both, likely leading to massive volatility.
“It’s moderates versus extremists,” said Atlanta-based Stephen Pair, chief executive officer of BitPay, one of the world’s largest bitcoin wallets. “It depends on how much a person values the majority of people staying on one chain at least for a little while longer, versus splitting and allowing each pursuing their own vision for scaling.”
As a reminder, investing legend Michgael Novogratz recently noted, that he’s looking to add more ether if it falls between $200 and $150… and more bitcoin if it falls to $2,000.