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Bitcoin Plunges Over $2,000 In A Week As Bitcoin Gold Launches

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Bitcoin Plunges Over $2,000 In A Week As Bitcoin Gold Launches

(Kitco News) - Bitcoin dropped more than $2,000 in just under a week, as traders digested the launch of the digital currency’s offshoot known as bitcoin gold on Sunday.

The popular digital currency was seen trading at an all-time high of $7,899.90 on November 8 but then dropped down to just $5,450.40 on November 12, according to Kitco's aggregated charts

Developers behind the bitcoin gold fork launched the new offshoot on Sunday at 2 p.m. E.T.

The split was first announced at the end of October, with bitcoin surviving the announcement by first seeing a decline and then a recovery in its price.

“Bitcoin Gold is now Live, having survived a massive and concerted attack from its first moment of existence,” said a blog post on the Bitcoingold.org.

What Is Bitcoin Gold?

Traditionally, when mining bitcoin, users are required to use high-powered, specialized hardware to work out math problems in order to approve transactions and earn coins. This meant that only a minority could actually afford to mine.

This inspired Jack Liao, the CEO of LightningASIC, to propose bitcoin gold. The purpose of the split was to reportedly expand the mining user base by making it easier to mine the cryptocurrency.

The new offshoot restricts the use of specialized chips for mining, according to CoinDesk.

All those who owned bitcoins received the same amount of bitcoin gold coins when the split occurred.

At its launch on Sunday, bitcoin gold traded at $354.75 and then dropped to $269.74.

Bitcoin Gold is the second split, which followed the creation of bitcoin cash in August. Bitcoin cash seemed to benefit from the launch of bitcoin gold, surging above $2,400 on Sunday, but shortly after dropping to $1,357.52.

More Splits Ahead?

To make things more confusing for traders, bitcoin recently managed to avoid a third split, which was scheduled to take place in mid-November, with developers planning to introduce an upgrade called SegWit2x. 

The idea was temporarily suspended after major developers reversed their support.

The main reason for scrapping the update was that it could “divide the community,” according to the email written by the lead developer of the team behind SegWit2x, Mike Belshe, chief executive of BitGo.

SegWit2x was meant to upgrade bitcoin network’s capacity by improving the speed with which it processes millions of daily transactions. But, the change would have impacted bitcoin’s rules and led to a split in the currency.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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