"Traders Are Selling Bitcoin, Buying Ether": Bitcoin Rebounds From Biggest Drop In Years

Tyler Durden's picture

The previously discussed fears of an imminent "forking" in Bitcoin have led to the biggest drop in Bitcoin between Thursday and Saturday, as investors sold the digital currency on worries about its future, although it managed to regain some footing on Monday, rebounding back over $1,000.  After soaring to an all-time high of $1,350 as recently as March 10 on speculation that regulators could approve the first U.S. bitcoin exchange traded fund the following day (the SEC denied the application but the negative impact was transitory), the digital currency then slipped back.

The drop accelerated on Thursday and BTC hit a five-week low of $944.36 on Saturday. But bitcoin recovered a little on Sunday and built on those gains on Monday, climbing around 2.5 percent to roughly $1,050.

As discussed over the weekend, the selloff was driven by a longstanding, and intensifying, row over whether - and how - to increase the capacity of the "blocks" that bitcoin transactions are processed in, so as to make sure there are no delays in transactions being finalised, which as of Sunday took as long as 4 months and the delay is growing ever faster, making a solution - even if unpalatable - inevitable.

"The bitcoin scaling debate is a risk for the network and highlights core issues in terms of governance and this is where more nimble crypto competitors see advantages in fleshing out their capabilities sooner," said Charles Hayter, CEO of digital currency analysis website Crytocompare, cited by Reuters.

However, as Bitcoin's sun may be setting - if only for the time being - it is rapidly rising for some of its most key "cryptocurrency" competitors, chief among them: ether. The digital currency behind Ethereum - a project that some experts say holds more potential than bitcoin and which recently was supported by a consortium of corporations including JPM and IBM - tripled in value this month, jumping to record highs in the mid-$50 before retracing some of the dramatic gains and stabilizing in the $40 range.

And while conventional capital markets may be experiencing a "great rotation" out of retail cash into ETFs as Reuters puts it, a similar dynamic was taking place in the cryptocoin realm: "some experts said traders were selling bitcoin and buying ether, which was exacerbating the falls in the original cryptocurrency."

As Reuters reported, "traders in the space are looking for better returns in the more risky and nascent cryptos such as Dash, Monero and Ethereum (and are) looking to replicate the extraordinary returns that bitcoin saw in its early days," added Hayter.

Meanwhile, with the recent Chinese crackdown on bitcoin seemingly eliminating the possibility of using the cyrptocurrency to bypass China's capital controls, sending Chinese trading volumes to nominal levels, thereby removing one of the most rabid buyers of the legacy cryptocoin, the biggest losers may be the Winklevoss twins: the SEC dashed Cameron and Tyler Winklevoss's bitcoin ambitions earlier in the month by rejecting their application to list an exchange-traded fund linked to the digital currency.

It remains to be seen if Ethereum and its altcoin peers can replicate the bitcoin move from 2013, when bitcoin went from double digits to over $1000 in the span of weeks.

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hedgeless_horseman's picture

 

Want to learn about crypto currency by shootin' the shit with experts over a drink?

Come to Marfa this June and hang out with us under the stars.

Crypto currencies: Ian Grigg and Ken Griffith, The Death of Banking and the Rise of New Financial Ecosystems - How to Make it Work For You

 

http://www.zerohedge.com/news/2017-01-10/time-has-come-first-zerohedge-s...

Notveryamused's picture

ETH price crashed harder than BTC this weekend/around same time as exchanges response to Bitcoin Fork news.

DASH was inversely correlated and outperformed switching to cash.
DCR is a much smaller CAP but set up by some of the original BTC core devs to address BTC governance issues and that rose by 50% this weekend.

My favourite short is ZEC. 11 by market cap & $75 a coin ATM. One of if not best in breed regards privacy, but creates 7200 new coins a day or about $200 million in annual inflation at current levels. This has historically and should in future cause to fall rapidly when current rise in crypto trading volumes subsides.

Stackers's picture

Pull up a 3day or weekly chart of bitcoin and this pullback turns into a big yawn.

Notveryamused's picture

My opinion is BTC will easily recover and hit new highs if Bitcoin Unlimited mined blocks starts to decline but if fork goes ahead I would expect significant turmoil short term with possible loss of faith and I would want to be well hedged.

The market was fine with Segwit solution even given its shortcomings so I hope something like that goes ahead.

aurum4040's picture

Ethereum will overtake bitcoin, the tech is alot better, much more capabilities, and the TPTB are fully behind it. Get on the Ether train before its too late. Gemini is the fastest way to acquire ETH. Long ether, gold and silver. 

beemasters's picture

I don't understand the craze. Exchanges sometimes sell at more than double the "value" of the cryptocurrencies themselves. When you plan to convert them to fiat, they charge you more.

aurum4040's picture

With all due respect, you are not looking in the right place. Whatever you are looking into is BS. Try Gemini for Ether, cheap as hell. Kraken is decent too. 

Notveryamused's picture

ETH controversially rolled back the DAO hack giving rise to the ETC fork, whose to say these major players in the ETH alliance (JP Morgan etc) don't already have a major stake and won't blacklist your transactions in future.

I'm currently long ETH given all the big players behind it & it could certainly overtake BTC through adoption of smart contract related products and services but it won't be viewed as digital gold/sound money by the market.

aurum4040's picture

Things happen, not worried about the fork, not worried about the players, the players already have a major stake and they will allow many to make money - they already have. They have to 'allow it' to allow confidence in the system. The World Food Programme is going to use Ether. It will be used in insurance, financial instruments, regular banking and much more. Intel, Microsoft, UBS, Wipro, BNY, JPM, and many others are all over it. Everyone here against it and or who is a non believer needs to open their mind. It has alot more potential than bitcoin. And I was never a big fan of big coin. Not everything in this world is 'completely rigged'. I am mostly a hard asset guy but know great potential especially tech wise when i see it. The DAO last summer was just a buying opportunity. Good to find someone else long ether. 

Dame Ednas Possum's picture

Sorry but I cannot give any credibility to the opinions of an author using nonsense sentences such as: 'the delay is growing ever faster...' 

If a person cannot even communicate beyond the level of a kindergarten student... why should I consider their investment 'advice' as having any merit? 

toknormal's picture

I very much doubt that "Ether will overtake bitcoin". Bitcoin doesn't derive its value from having 'good tech' but from authenticity as a secure, original and safe store of value.

Ether is in a completely different market - basically the washing machine and kettle house appliances market. It isn't a monetary stock, it's a tech stock and as such will have its monetary premium capped by competing technologies (not least its own former-self now that the network has already forked).

Ether=great technology platform. SH*t monetary store of value.

Zero_Ledge's picture

Back in the 1890s, my great-grandfather invested in the Luminiferous Aether. It didn't turn out so well.  Then, his son, my grandfather, invested in gold coins.  Those I still have....

Notveryamused's picture

Missing out on Bitcoin because you disagree that it's the closest digital approximation to gold we currently have is fine but blockchain related technology and its applications is massively expanding and will disintermediate many industries so it's worth learning more about.

Zero_Ledge's picture

I've learned plenty about Bitcoin.  The most important aspect is that there is nothing at all unique about it.  Hence the ridiculous number of imitators we see now. Literally anyone can start their own cryptocurrency. You can argue all you want about "acceptance" of Bitcoin, but acceptance can disappear just as quickly.

Notveryamused's picture

I mean the underlying technology. AUG for example, 9 by market cap, will soon be releasing decentralised prediction markets (incl. sports betting) and will do so for 1% in total fees. Considering that the average bookmaker charges 10% and many global betting markets are restricted it's potential is huge. MAID, 10th by cap already has a working version of a deventralized internet and could release this year. (Information is encrypted and split up among tens of thousands of users and can only be re-assembled and accessed with your code.) An internet where you are free from .gov spying...

& many many more https://www.cbinsights.com/blog/industries-disrupted-blockchain/

aurum4040's picture

Bitcoin isnt just a cryptocurrency - its technology that you can buy. Its a digital asset just like buying a data center 'reit' like COR...but better. And  the tech behind ethereum has a hell of alot more potential than bitcoin and it will only get better in time with trillions of dollars backing the tech. 

Spaced Out's picture

"nothing at all unique" about btc? lol. Where exactly did you "learn" that garbage?

HRH Feant's picture
HRH Feant (not verified) Notveryamused Mar 20, 2017 8:50 PM

Bitcoin is not going to go mainstream if it takes 20 minutes or longer to verify the block chain and if that time gap allows people to double dip and cash out prior to being verified. No fucking way is that BS going to work with banks and the mainstream.

You can try and hype / sell a Ponzi all you want. But in the end it is just a Ponzi.

I actually like Visa / MC / DIscover / AMeX. Why? Because I can make a purchase, that purchase is verified and it doesn't take 20 fucking minutes! Along with the fact that I can't double and triple dip and resell shit I don't actually own.

I feel sorry for the younglings that bought into this bullshit. As I always say, your ignorance is not my fucking problem.

hedgeless_horseman's picture

 

the fact that I can't double and triple dip and resell shit I don't actually own.

Don't forget busting trades that are losers.  I know more than a few fortunes that were made by kiting checks DVP on Wall Street.

HRH Feant's picture

In Marfa, Texas? Goodie goodie gumdrops.

This is nothing more than rehypothecation in digital form. If you want to participate, by all means, feel free to go all in.

Your stupidity, and losses, are, once again, not my fucking problem.

hedgeless_horseman's picture

 

Sadly, you fail to recognize that I was agreeing with your post. Then you revert to ad hominem attack and false inference.

Why do so many women seem to take things they don't understand as a personal attack?

 

HRH Feant's picture

Being obscure and then claiming you agreed with me is wierd.

I probably would have been fine with flying to DFW. But Marfa? Have you looked at the maps to get to that location? Via air? Great if you are a pilot with your own plane. If you don't have your own plane Marfa is a hard place to get to.

Throw in the fact that ZH is a huge honeypot and I just can't take that risk. Not for you. Not for anyone. If you think my honesty is an ad hominem attack, so be it. I come here because I can speak my truth. That truth has nothing to do with my being female. Zero. My bills are the same as yours.

Mortgage, property taxes, homeowners insurance, auto insurance, health insurance, food, fresh underwear, gasoline / electricity / cable / internet / sewer / water / natural gas / garbage pick up / landscaper to mow the front lawn.

I can minimize some costs, others, not so much. None of those expenses are gender based. Zero. I have never thrown out the gender card here on ZH. Not one fucking time. I never use it as an excuse as to why I can't / won't do something. That is bullshit. I hate those kind of women.

I have a mind. I can save. I can run my own numbers and extrapolate my expenses and calculate future costs based on the current rate of inflation.

By the way, so far, in my family, the women die younger than men. My grandfather and father outlived my mother and grandmother by 20 years. It's a crapshoot. Will I live longer than my female counterparts? I have no idea. My crystal ball is fucking broken.

Lockesmith's picture

One sentence to produce 6 paragraphs of response. That's what I call "leveraged shitposting"

lil dirtball's picture

Lol ... 'ether'. (((They))) howl with laughter at us.

Howl.

Crash Overide's picture

Isn't the Federal Reserve a multi trillion dollar ponzi scheme?

HRH Feant's picture
HRH Feant (not verified) Crash Overide Mar 20, 2017 9:22 PM

W/E. At the current time FRNs can be traded for Silver and Gold along with lead, brass, and guns. Good enough for me.

The problem with Bitcoin (and other digital formats) is the legality of that format has not been proven.

I like watching proof-of-concept videos. Or reading proof-of-concept white papers. When the only proof of concept for Bitcoin is they passed on the Ponzi to China (great imitators that are rarely originalists) excuse me if I pass on the latest greatest bubble.

If you want to be dumb, young, and full of cum, go ahead. Indulge. When you end up broke and with VD or AIDS oh well.

Lockesmith's picture

"Legality"
What you mean to say, is that you are afraid that the government will decide to beat you and throw you in the rape cage if it doesn't like competition.

Notveryamused's picture

Yet gold is adopted as a currency and store of value despite much longer transaction times. Also the double spending you speak of almost never occurs, gold rehypothecation on the other hand...

I'm still a major gold bug btw.

HRH Feant's picture
HRH Feant (not verified) Notveryamused Mar 20, 2017 9:25 PM

PMs can be rehypothecated. Absolutely. Unless you take physcial possession and do not give up control to the latest, greatest huckster.

bcking's picture

The fix is coming for BTC but not your mind. One thing has a future, the other does not. Get back to packing my groceries before I tell your manager.

SILVERGEDDON's picture

Any minute now, Douche bag Mac douche is gonna start yapping about how he is Fonestar reincarnated.

Guy wouldn't even be allowed to lick Fonestar's shoes clean after giving him a happy ending.  

Put a sock on it, Douchie.

Digital clown bux are for muppets, and losers.

Bitcoin is the dangerous outlaw gateway drug digital currency.

Gonna get you hooked worse than a zero rate credit card, and then pull the carpet out from under your sorry ass.

Fuck that shit.  

stacking12321's picture

instead of arguing with an imaginary foe who isn't even here, maybe a better question is, why do you keep clicking on and commenting on, bitcoin-related articles?

clearly, you have an interest in the subject, silvergeddon.

here's a good place to read up on bitcoin:

https://www.bitcoin.com/getting-started

let me know when you have a bitcoin wallet address set up, and i'll send you $5 in bitcoin to get you started, no risk to you.

licutis's picture

i think i did this right 16BsExeZdbEX8cd5ag7GwPAwkzKYR1mex5

tenpanhandle's picture

but that's only a bitpenny.

no ice's picture

Here's an excellent interview that Jeff Berwick just did with cryptocurrency expert Trace Mayer: https://www.youtube.com/watch?v=PuW66xlUW9A

Well worth watching.  

tmosley's picture

>Still no story on Dash, the privacy oriented cryptocurrency

Tyler, I am disappoint.

aurum4040's picture

Thats because ethereum is the real story, get on the Ether train my friend. It has the most potential out of all cryptos hell even the World Food Programme is going to use ether - read about it. 

nomofiat's picture

what ether pumpers fail to mention is that all these companies interested in using ethereum (banks, world food programm, etc) have no interest in using the ether token. They just rip the ethereum code base and don't transact on the public blockchain at all.

 

furthermore ethereum scales far worse on chain then bitcoin. Also, any functionality ethereum potentially has to offer can be replicated on other blockchains like bitcoin with the added advantage that one DAO fuck up does not bring down the entire blockchain.

babkjl's picture

Agree. Big news that a Dash branded and funded MasterCard debit card was just approved by the Masternode network. That means we will be able to buy groceries and travel the world with it for very low fees.

Old Hickory16's picture

Bitcoin is going to 10k this year if it forks into Bitcoin Unlimited.  This NEEDS to happen!

SILVERGEDDON's picture

Chinks are gonna stick a fork in Bitcoin, and bar b q it along side the family dog.

CJgipper's picture

I work in brands and adoption.  If you have btc alongside btu just as the public is starting to be aware of bitcoin, you'll end up with bitcoin eating itself.  It'll be worthless as the public seeks out the simpler path like ether or dash because it's easier to understand their brand and there's zero confusion

 

EHM's picture

Plenty of substitutes. I'm also in marketing and see the same issues.

Old Hickory16's picture

Bitcoin is going to 10k this year if it forks into Bitcoin Unlimited.  This NEEDS to happen!

NoDecaf's picture

It's going to fork into 'Myspacecoin'

that is if it doesn't get cornered by SNAP and become "Snapcoin"

 

wouldn't you like to own a snapcoin?

tenpanhandle's picture

snapcoin...that sounds like it has possibilities.  A snapcoin would soon be known as a snapper for short.  Buy a snap coin on margin and you'd have a redsnapper.

malek's picture

Quick, release a rumor about forking Ethereum, to stabilize Bitcoin!

TheytookERjobs's picture

Everyone is way behind the curve. Iota is coming after Eth and Bitcoin in a big way

 

Iota

- No blockchain

- No fees 

- No scability problems

- Quantum resistant

- Multi billion companies already making deals with the iota foundation 

 

This is not fake news! Iota hits the exchanges next week after years of development with the policy of no hype (unlike the centralized Ethereum).

Good luck

HRH Feant's picture
HRH Feant (not verified) Mar 20, 2017 8:46 PM

I watched a video posted previously that was 2 fucking hours long. The dude with the man bun had his panties in a twist.

As far as I can tell shitcoin is just one more Tulip Fest, Ponzie scheme being dumbed on the young, dumb, and full of cum.

Oh well. As I have said before: not my problem. And I hate communists. Don't even think about stealing what I own.