Bitcoin Plunges By 29 pct Over The Weekend But Recovers

Buyers are returning to the market after Bitcoin bounced back during Monday’s early trading from the weekend’s 29 percent crash. Bitcoin has turned out to be one of the most volatile investments in the market today.

In just 12 hours, Bitcoin recovered nearly $10 billion after its heavy losses over the weekend. The cryptocurrency was able to recover by 11 percent when it started trading at $5,857.32 on Monday and climbed by as much as 15.6 percent to reach a session high of $6,770.37.

By the end of Monday, the market cap for Bitcoin recovered to $108 billion.

This dramatic comeback from the largest cryptocurrency in the world came after it dropped to as low as $5555 during the weekend, which is Bitcoin’s third major plunge this year.

Core Finance

The cryptocurrency suffered similar losses in July plunging 38 percent and again in September plunging 40 percent. But just like the previous dips, investors would jump back into the market right after a crash, which has helped boost the cryptocurrency to even higher level than its previous months. This year alone, Bitcoin has seen a more than 500 percent surge.

As analysts have noted, Bitcoin trading is not for the faint of heart. Prices soar and plunge at explosive levels. Before the weekend crash, Bitcoin saw its record high at $7,882. The surge was attributed to the recent announcements to offer bitcoin futures contracts, the legalization of Bitcoin as a method of payment in Japan and the expected Segwit2x upgrade.

Many believe that Bitcoin’s record plunge over the weekend was brought about by the announcement that developers had cancelled the planned Segwit2x upgrade. The blocksize upgrade would have doubled Bitcoin’s existing blocksize from one megabyte to two and would have resulted in faster transaction speeds. The priority for faster transactions were evident in the rise of Bitcoin Cash, an offshoot of Bitcoin.

According to Mike Kayamori, head of Tokyo-based Quoine, who has been very active in the Bitcoin market, the volatile prices of Bitcoin was brought about by the market switching support to Bitcoin Cash. Bitcoin Cash, unlike the original Bitcoin, prioritizes fast and cheap payments at a blockchain that has eight times the data processing power of the original. This is why many believe that Bitcoin’s SegWit2x loss has been Bitcoin Cash's gain.

In a statement, Kayamori said

Supporters of bitcoin’s technology upgrade are now switching support to bitcoin cash. There’s a panic about what’s happening. People shouldn’t panic. Just hold on to both coins until we see how it plays out.

---