- The price of bitcoin, the red-hot digital cryptocurrency, was trading down 7.2% on Friday afternoon, at $6,618 a coin.
- That’s down more than $1,000 from its all-time high of nearly $7,900 a coin, which it hit on Wednesday after news broke that a planned upgrade to the network had been called off.
- But now money is pouring out of bitcoin and into bitcoin cash, the cryptocurrency that split from bitcoin in August.
- Bitcoin cash soared to an all-time high of $1,009 a coin on Friday afternoon.
Bitcoin has shed more than $1,000 over the past 48 hours.
On the other hand, bitcoin cash, the cryptocurrency that split from bitcoin in August, reached an all-time high of $1,009 a coin on Friday afternoon, according to data from Markets Insider. It was trading up more than 50%.
Experts think bitcoin’s crash and bitcoin cash’s rise are related to the same thing: a planned upgrade to bitcoin’s network being called off.
Developers behind the upgrade, known as Segwit2X, revoked their support on Wednesday, meaning bitcoin’s network will remain intact – at least for now.
The news initially sent bitcoin to an all-time high of nearly $7,900 a coin. But at 2:40 p.m. ET on Friday, it was trading down 7.2%, at $6,812.
Segwit2X was designed to increase the size of the blocks underpinning the bitcoin blockchain network to enable it to process more transactions more quickly. Backers thought the plan would help the digital currency scale faster.
A fork in the network resulting from the upgrade would have doubled the number of coins some investors owned – just as it did when bitcoin cash split from the original bitcoin network.
Tor Bair, the head of growth for Enigma, a crypto-investment platform, told Business Insider that investors might have increased their bitcoin holdings in hopes of getting more clone coins.
“Some traders may have been attempting a ‘dividend play’ on the Segwit2X fork and purchasing bitcoin in anticipation,” Blair said. “With the fork called off, these speculators are now reducing their positions.”
Another expert told Business Insider that backers of Segwit2X might be switching over from bitcoin to bitcoin cash.
“When you look at the trends, it does look like many Segwit2X supporters have switched to bitcoin cash,” Abhishek Pitti, the CEO of Nucleus Vision, a blockchain-technology company, said in a statement. “The forked currency has seen a 35% increase in a matter of days.”