Weekly Roundup: Markets Struck With Heavy Blow, Reel from BCash Civil War
In this week’s edition, we keep you up to date with detailed coverage of the latest round of sell-offs to grip the crypto markets, discuss why the Bitcoin Cash hard fork has perhaps created some un-healable fissures in the BCH community, and take a close inspection of one coin in particular that defied all odds to post 30%+ gains in a week when most other coins saw the exact opposite.
BTC Drops Below $4,000, Worst Potentially Still to Come
In one of its worst weekly sell-offs on record, bitcoin plunged over 33% in yet another move downward that left most investors feeling confused and rattled. Prices dropped as low as $3456 before heading back up to the $4000 range by early Monday morning. Almost all coins in the top 100 by market cap suffered double-digit gains, some of them losing nearly half their value in a month when trading forces had already been particularly unkind. Among the top 10 coins, Bitcoin Cash (BCH), recently coming off of a bad divorce with Craig Wright of nChain, was down a whopping 40%, with its fork contender Bitcoin SV officially splintered into its own altcoin, given a consolation prize of 10th place in the current market cap rankings and its own trading symbol of BSV.
As usual, analysts remain largely split on where the price of BTC would head next, with some calling for lows around $1,500 and other assured that there was nowhere to go but up from now until the end of the year. Some technical analysts are employing the use of a “descending wedge”-shaped pattern to place a low of bitcoin around $3,500 sometime near November 30th, which could prove to be a make-or-break moment – “make” if BTC remains above $3,500 and “break” if it falls below (which would entail an extremely bearish future for bitcoin).
Even a 200% rebound in price for most altcoins would be but a paltry Christmas gift for mostinvestors who made their investments any time before November, though at this point – after a long, cold spell of pain-inflicting downward price action – crypto enthusiasts would be happy to receive any kind of positive news that they could get. Still, its worth being reminded of that bitcoin has suffered worse and longer losing streaks in the past, only to return triumphantly and stronger than ever before, as are shown in the below table:
Bitcoin Cash Civil War Over, Aftermath Lingers
Though it had been declared over as early as one week ago, the great BCH “hash war” has officially drawn to a close, largely thanks to Craig Wright, leader of the BCH SV faction (now referred to as Bitcoin SV), acquiescing that he would no longer be pursuing the BCH trading symbol. Wright is now concentrating on the future of his new coin, professing that “billions” would soon be using Bitcoin SV and that it would have a transformative effect on global finances that would massively outweigh those of bitcoin (BTC). In the battle, which we had covered previously at length, two of cryptocurrency’s biggest egos pitted themselves against each other, Roger Ver (of bitcoin.com) backing Bitcoin ABC, and Craig Wright (nChain) backing Bitcoin SV.
Ver’s celebrity stems from his early involvement in bitcoin and his helping to establish Bitpay, a service that made it easier for merchants to accept bitcoin from customers. Wright’s celebrity comes a bit more recently, from his 2016 claim that he was actually Satoshi Nakamoto. Wright’s inability to adequately demonstrate cryptographic proof that he was actually Nakamoto did not stop him from a career in cryptocurrency, joining the BCH bandwagon in its early stages.
Even after the hash war’s end – a war in which there were no real winners, as the combined price of both forks is still far short of BCH’s value moments prior to the fork – the two camps remain staunchly divided, some considering their feud to be a mark of a newfound extremism in cryptocurrency. In a YouTube video published on November 8th, Roger Ver shows a screenshot of an email he reportedly received from Wright, weeks prior to the November 15th BCH hard fork, which, more or less, read as a direct declaration of war:
“If you want a war… I will do 2 years of no trade. Nothing. In the war, no coin can trade. If you want ABC, you want shitcoins, welcome to bankruptcy. It was nice knowing you. Bitcoin will die before ABC shits on it. I will see BCH trade at 0 for a few years. Will you? Side with ABC, you hate bitcoin, you are my enemy. You have fucking no idea what that means. You will.
I AM Satoshi. Have a nice life. You will now discover me when pissed off. And, no. You Could have had proof. Your choice. Fuck you,
Wright was no doubt unhappy about Ver’s recent announcement that he and his resources would be backing the Bitcoin ABC side of the fork and expressed his distaste for the decision quite forwardly. In his video, Ver also expresses his disbelief of Wright’s claim of being Satoshi Nakamoto, echoing words said months prior by Ethereum’s Vitalik Buterin, another one of Wright’s critics:
“I’ll close this video with a point made by Vitalik Buterin, another one of these absolute geniuses that the crypto-coin ecosystem is so lucky to have: In reference to Craig he said that if it turned out that Craig was Satoshi, it would lower his opinion of Satoshi, (but) it wouldn’t improve his opinion of Craig… And I think I agree with Vitalik on that point.”
Among the other crypto celebrities Wright has taken aim at in recent weeks is John McAfee, who, unsurprisingly, also came down on the side of Bitcoin ABC during the fork debacle. While pledging his support for ABC, he simultaneously expressed his disbelief that Wright was Satoshi Nakamoto, drawing ire from Wright in yet another Twitter feud.
Just a reminder
McFee is a conman and scammer
Remember that "unhackable" wallet with zero Security a few months ago. https://t.co/EH2l69LSzF
— Dr Craig S Wright (@ProfFaustus) November 15, 2018
Other targets of Wright during the hash war included Ethereum (which he called “useless”), Ripple (which he claimed was “illegal”), and bitcoin itself, which he claims is no longer “bitcoin” because the implementation of SegWit strayed it too far from its founding principles. One thing for certain is that the hash war has seemingly hurt everybody involved in cryptocurrency and helped nobody, except for maybe Craig Wright, who is now the leader of a new cryptocurrency born out of the mess, Bitcoin SV (BSV). BSV’s lack of a dedicated wallet and support from the community, industry and exchanges will prove to be a setback for the new altcoin in the near term, with Wright’s level of perseverance dedicated to nurturing its ecosystem yet to be established.
Coins Bucking the Trend
Out of the top 100 coins by market capitalization value, there were a mere 5 that ended the week in positive territory. One of these coins exhibited particularly bullish behavior amidst the ongoing crypto slaughter, beating not only bitcoin but the dollar as well, in terms of rising value. It is worth taking a closer inspection to discover what makes it tick.
Factom (FCT) (+35% over last 7 days)
Next to Ripple (XRP), Factom is the second-most famous centralized blockchain service. Launched in the spring of 2015, Factom provides a platform through which anybody can organize data and keep it stored on the bitcoin blockchain, however, decoding this information is dependent on access to Factom’s own servers. It thereby offers an immutable record keeping system designed with businesses in mind, using its own coin (called a Factoid) as the native currency for subscription services.
For years, Factom chugged along with little fanfare. Though moderately successful – reaching the #10 spot by market cap in January 2016 – it picked up almost none of the public recognition achieved by more sensational products like Ripple and Ethereum. Factom was privileged enough to be swept up in the crypto craze that rocked the last quarter of 2017, briefly surpassing a market cap of $600 million in early January 2018.
After falling to about 10% of its all-time highs (as many cryptocurrencies have done this year), FCT showed new signs of life in mid November, and it has almost doubled in price in the last 10 days alone. This is quite a remarkable feat given how almost the entirety of the altcoin market has done the exact opposite during this time frame, and Factom has a couple of factors to thank for that. For one, its “blockchain-as-a-service” product was recently picked up by real estate loan software company Equator. The company plans to use Factom to simplify the complexities of the mortgage default process, which can be quite taxing and require a sophisticated auditing process.
The second thing Factom has going for it is a new exchange listing: Coincheck. The Japanese exchange was the victim of a widely publicized hacking incident earlier this year, in which hundreds of millions of dollars worth of NEM (XEM) were stolen, along with smaller amounts of other coins. Coincheck was purchased for $33.5 million in March and saved from bankruptcy, restored to functioning status in October, and as a sign of increased vitality, has offered 2 new coin listings, FCT and XRP. It should be noted that FCT trading volume remains relatively low, and while the new business being brought by their partnership with Equator is great, it might not be enough to help the coin keep its tremendous gains in an otherwise awful-looking marketspace.
Also in the News
- Famed whistleblower Edward Snowden is in the news again, this time with a new opinion about bitcoin. While still in political asylum in Moscow, Snowden was recently the subject of an interview with a member of the ACLU in which he presented his opinion that bitcoin would likely soon be replaced by other cryptocurrencies. He remarked that while bitcoin “may not yet really be private money… it is the first ‘free’ money,” and that the invention of blockchain technology had the capability of providing political freedoms to people in addition to financial freedoms.
- Among the flood of classified documents containing revelations about the inner-workings of the NSA Snowden has released to the public were those detailing how bitcoin was the NSA’s “#1 priority” in terms of figuring out how to use the blockchain to identify potential money laundering, terrorist and other criminal operations.
- A 19 year-old bomb hoaxer, convicted earlier this year for making over 2,000 bomb threats via the dark web in exchange for bitcoin, headed for prison on Sunday. The American-Israeli teenager, who made his anonymous bomb threats for a living, was sentenced to a decade in prison by a Tel Aviv court after receiving a total of 184 BTC from dark net customers over a 2-year span. His hoaxes, all carried out between 2015 and 2017, earned him the nickname the “JCC bomb hoaxer” in Israel, due to his emphasis on targeting Jewish Community Centers. Some of his other targets of note included commercial airlines, airports, police stations, malls, hospitals, and even schools – each category of target having different price points.According to Israeli media reports, some of the bomb threats were made to schools by students who wanted to have their exams delayed.
- The teen’s ceaseless series of bomb hoaxes created panic throughout several countries and at times resulted in compulsory mass evacuations, so police and emergency services could respond. On a few occasions, threats to airlines caused fighter jets to scramble to escort commercial planes that had been forced to land.
- “One can easily imagine the terror, the fear and the horror that gripped the airplane passengers who were forced to make an emergency landing, some of whom were injured while evacuating the plane and the terrified panic caused when there was a need to evacuate pupils from schools because of fake bomb threats,” said Judge Zvi Gurfinkel. Countries afflicted by the hoax bomber included not only Israel and the United States, but the U.K., Germany, Canada, Australia, Sweden, Norway, Denmark, Ireland, Belgium, New Zealand, and Argentina.
- The bomb hoaxer issued his threats from his parent’s home in a coastal city in southern Israel and used hi-tech software to alter his voice and mask his location. The investigation of his crimes took a joint effort between the Israeli Police and the FBI, and occasionally other federal agencies across the globe. Even after his capture, the teen refused to release the private key of his bitcoin wallet to authorities, which is thought to still contain the majority of his dark web activity earnings.