Silver as an investment

Bitcoin Battered Below $2000, Ether Tumbles As August 1st Scaling Deadline Looms

zerohedge.com / by Tyler Durden / Jul 15, 2017 11:51 AM

It’s another ugly day in cryptocurrency land. As anxiety over the looming ‘civil war’ deadline of August 1st grows, so it appears the entire virtual currency space is being derisked, with Bitcoin down over 10% today (below $2000) and Ether down 6% (at around $175).

As Bloomberg reports, it’s time for bitcoin traders to batten down the hatches.

 The notoriously volatile cryptocurrency, whose 160 percent surge this year has captivated everyone from Wall Street bankers to Chinese grandmothers, could be headed for one of its most turbulent stretches yet.

 Blame the bitcoin civil war. After two years of largely behind-the-scenes bickering, 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. That has raised the possibility that bitcoin will split in two, an unprecedented event that would send shockwaves through the $41 billion market.

 While both sides have big incentives to reach a consensus, bitcoin’s lack of a central authority has made compromise difficult. Even professional traders who’ve followed the dispute’s twists and turns aren’t sure how it will all pan out. Their advice: brace for volatility and be ready to act fast once a clear outcome emerges.

 “It’s a high-stakes game of chicken,” said Arthur Hayes, a former market maker at Citigroup Inc. who now runs BitMEX, a bitcoin derivatives venue in Hong Kong. “If you’re a trader, there’s a lot of uncertainty as to what happens. Once there’s a definitive signal about what will be done, the price could move very quickly.”

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