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Bitcoin Takes a Nosedive, But Here’s Why You Should HODL

There has been no change in the fundamentals of Bitcoin, except a pump and dump, insider trading and FUD against the network. Which is why you should HODL.

It’s no secret that the cryptocurrency market is volatile. We’ve seen Bitcoin rallies of 20% gains in a day, and at the moment we’re seeing something of the opposite sort. As the transaction volume and number of users of the network rises, though, we expect to see some stability. Nope! Bitcoin is crashing again. Here’s why it doesn’t matter.

cryptocurrency market cap bitcoin 22 december 2017
Here’s what Coinmarketcap looks like right now.

Bitcoin Cash Price Manipulation, Insider Trading, and FUD

For the uninitiated, Bitcoin Cash (BCH)  is a hard fork of Bitcoin (BTC) with an 8MB block size, instead of the traditional 1MB in the original network. BCH believers contend that Satoshi’s original vision was for Bitcoin to remain a cashless, peer-to-peer transaction network, like in the whitepaper. Today, they fear, Bitcoin has become bulky, slow and expensive. Buying a coffee would cost $15 in transaction fees, and moving a good amount of money can put the fee at several hundred dollars. Obviously not in line with what Satoshi intended.

bitcoin coffee transaction fees
3 dollars for the coffee, 45 dollars to AntPool for the privilege of bookkeeping your bit of the blockchain.

Bitcoin believers, however, contend that Bitcoin Cash is an alt-coin using the Bitcoin name to manipulate new investors into thinking it is related to the original. They also believe BCH was invented by a consortium of Bitcoin millionaires like Jihan Wu and Roger Ver as a get rich quick scheme. In Jihan’s case, to peddle his ASIC wares in Bitmain.

There’s no denying that what happened on November 8th 2017 and December 20th 2017 were both pump and dump plays by the people behind Bitcoin Cash, whoever that is. People also find it quite sleazy that Roger Ver decided to ripoff the Bitcoin brand when he could just as easily have created his own, viable cryptocurrency with its own brand, such as what RaiBlocks is doing.

How Coinbase Was Involved

Coinbase had previously announced they would release Bitcoin Cash by January 2018, however, the expected descent of BCH into GDAX, their trading platform, caught many people off guard. Coinbase is one of the largest exchanges in the world, and the largest in the US. When a fourth cryptocurrency is listed there, it’s a big deal. This time, however, it was met with a price increase several hours before the announcement. Which leads to some suspicion around whether there were insiders involved before it being listed on GDAX.

Unfortunately, BCH from the get go on Coinbase has been riddled with controversy. A few hours after BCH became available, Roger Ver appeared on CNBC under the moniker of ‘Bitcoin Jesus’. At the same time the price temporarily shot up to $9000 on GDAX, the trading platform owned by Coinbase. A few BCH were traded at that price before they decided to shut down trading due to “volatility”. Over the course of the next few hours, the price of Bitcoin Cash almost doubled over 24 hours on various exchanges. You can imagine the uncertainty this caused in the opposite faction of BTC holders. It reflected in the price of Bitcoin, which dropped from $19,000 to the $16,000 levels.

When trading finally began on GDAX, the price of BCH made a slow creep downwards before the entire cryptocurrency market came crashing down earlier today. With its culmination at $610 billion, the market cap of all cryptocurrencies now sits at $480 billion. It’ll go up (or down) by the time you read this article, but this just proves what a volatile space we’re in.

Coinbase has since announced an investigation into the price manipulation that went on.

Why you should HODL

We live in a time where the default price trend for a cryptocurrency is up. Even with no news and no announcements, a cryptocurrency can easily rise 30-40% over the course of a week. Every time a market correction is imminent, the naysayers shout that it’s time to jump ship. The price of Bitcoin is heavily correlated with the market cap of the entire cryptocurrency world, which means that if big boy Bitcoin goes down, everyone goes down. And vice versa.

Bitcoin has survived Mt. Gox. It’s survived Ethereum being 50% of its price, earlier this year. It’s survived the November 8th pump and dump. Therefore it’s very unlikely that Bitcoin doesn’t survive an insider trading pump and dump from a network who have attempted this before.

The truth is, there is demand for cryptocurrency. We don’t know whether Bitcoin is going to be around in 5 years, or whether it’ll be someone else. We do know that people have been saying the same thing 5 years ago. People have been calling for the network’s failure since time immemorial. The underlying technology that’s intrinsic to every crypto is something that’s sought after and valuable. The Bitcoin experiment may fail. The Bitcoin Cash experiment may fail. But the blockchain won’t fail, and while that remains a truth, neither will the market dominator, Bitcoin.

What is HODL? Hold with a D before the L. Old meme.

Written by Upamanyu Acharya

I founded Fynestuff. I play games, write TV and tech articles and look towards putting Buzzfeed out of business someday. Reach me on Twitter:
@upa007

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