Welcome back to Chasing Bitcoin! The blog tracing us through Bitcoin’s short yet fascinating history. Volatility continues to shake Bitcoin and the crypto market, with the former down just over 4% in the last seven days at the time of writing. Bitcoin’s price is below $50,000 currently, but our analysts still have faith that the bull market is intact.
Last time, we discussed how impactful the year 2017 was for Bitcoin. As it turns out, this year was so impactful that we had to leave one crucial event out. This event was the hard fork of the Bitcoin blockchain to create Bitcoin Cash (BCH). Most of you have probably heard of Bitcoin Cash at this point, at the time of writing it’s the 24th most valuable cryptocurrency by market cap. However, you may not know the story of the division that led to the creation of BCH.
During the summer of 2017, there was a heated debate among Bitcoiners over block size limits. Proponents of Bitcoin Cash argued that eight-megabyte blocks would allow Bitcoin to be used as a transactional currency more effectively; detractors believed that the upgrade required too many resources for the common node operator. The debate was largely centered around the use of Bitcoin as a currency versus a store of value. The Bitcoin blockchain officially forked on August 1, 2017, creating Bitcoin Cash. Because of the larger block size, Bitcoin Cash offers faster transactions times and fewer than traditional Bitcoin transactions. Shortly after the fork, BCH peaked at a price of $3,785 on December 20, 2017.
As did many other coins, Bitcoin Cash could not maintain those prices forever, dropping to under $150 during the depths of the 2018-2019 bear market. This bear market is the longest in Bitcoin’s history. February 2, 2019, marked the 411th consecutive day that Bitcoin’s price had declined, surpassing the 410-day price decline of the 2013-2015 bear market. The price of Bitcoin dropped over 80% during this period and many investors saw their savings wiped away seemingly in the blink of an eye. Bear markets are some of the most humbling events that can happen in investing, but for those who play their cards right, they can also be the best time for accumulation.
Bitcoin is typically very quiet during bear markets, with little news coming from the asset. But in 2019, more FUD out of China got us all talking about BTC again. We hope you will join us next time as we discuss the next time China tried to shake out weak hands.