Bitcoin Cash Spikes To Record High As Bitcoin Collapses Over $1000

Tyler Durden's picture

Following the surge in Bitcoin's USD price after the suspension of the SegWit2x hard fork, the cryptocurrency has collapsed as traders exit 'fork dividend' trades.

Dennis Gartman had a few words of praise for the bulls right before the collapse...

Well “bully” for Those Who’d Gotten It Right: Our “position” on Bitcoin and the other cryptos is clear: we shall have nothing whatsoever to do with them, but “good on” those who’ve been long and right; but be careful… all Bubbles eventually end in tears.

As bitcoin fell, Bitcoin Cash - a clone of the original that was generated from another split on Aug.1 - surged, trading up as much as 35%, ahead of this weekend's launch of Bitcoin Gold.

 

This is all happening as CoinDesk reports, Bitcoin gold is set to go live this weekend.

In a new blog post, the developers behind the fork of the bitcoin blockchain said that they would release a formal software client for download at 7:00 PM UTC on Nov. 12. Originally set for a public launch on Nov. 1, the project is backed by LightningASIC, a seller of mining hardware based in Hong Kong, as well as a community of relatively unknown developers.

As reported by CoinDesk, the idea behind bitcoin gold is to keep most properties of the protocol, but restrict the use of specialized chips for mining, or the process by which new transactions are added to a blockchain (while also creating new tokens as a reward).

It's also the latest example of a "airdropped" cryptocurrency that will distribute new coins to anyone who owned bitcoin at the time of the split, or up until the date the ledger of transactions started to differ.

Yet in a move criticized by some observers, the team behind bitcoin gold has been mining blocks in insolation since the new network was formally created last month, with a certain amount of coins being set aside to support development.

In comments, the team behind the effort sought to send a signal of confidence to the market, perhaps owing to concerns circulating around the effort.

"We are extremely grateful for the community around the world who have been contributing hash power to our testnets; besides patiently testing their own mining process, they allow exchanges, pools, wallet developers, and all other service operators to implement and test their support of BTG so that the bitcoin gold community can have a full suite of services at launch time," the project's backers said in a statement.

In the days ahead, exchanges will no doubt be watching the launch. Soon after its August release, bitcoin cash, another cryptocurrency that forked the bitcoin network, amassed a nearly $4 billion market value.

Exchanges and traders will no doubt be watching to see if history repeats.

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Boing_Snap's picture

Cryptos are Ponzi instruments, the Ponzi is that they all support each other by the way they are traded.

When you trade crypto you start out by buying bitCoin or whatever on an exchange, so you send the exchange money to open an account, you buy BC and then because you can't trust the exchange you put the BC into a Wallet.

The use of the Wallet is where the Ponzi is at play.

Next thing you know you want to sell your BC, so you take BC out of your wallet put it onto the exchange and sell. The exchange credits your account with $.

So now what do you do? If you demand the $ from the exchange, they'll demand your full disclosure, and that is a taxable event. So you pick the next crypto and you buy it and put it into your Wallet.

Now imagine what happens when thousands of people are doing the same thing. The sell off from $7900 BC showed you exactly that, big sell off in BC, and a jump up in the Alt coins. Those that held the Alt coins at the time saw a big jump up and sold, and bought BC on the dip, and BC recovered somewhat.

Rinse and repeat and you have the Ponzi of our time. The only new money are the first time players getting into cryptos, or any new money added from outside the loop by existing players.

 

tmosley's picture

>If you demand the $ from the exchange, they'll demand your full disclosure, and that is a taxable event.

Oy vey! Having to pay taxes on gains! It's 6,000,000 times worse that the Holocaust!

The Divided Stoopids of DuhMerica's picture

Last I checked there were CG tax on any stocks I sold as well.

Justin Case's picture

I wonder how they cash out $1,500,000.00 at the exchange? Is it in bundled 100's in an attache case or just a garbage bag to save money or a cheque so it's traceable for the FEDS?

RedDwarf's picture

Incredible.  So transaction fees for converting X to Y, such as from BitCoin to USD, means X is a Ponzi scheme in your eyes.  By that ridiculous logic gold and silver are also Ponzi schemes since when you buy or sell bullion you pay a transaction fee as well to the store.

Txpl9421's picture

What backs gold?  There is no government backing gold.  It does not have the full faith or credit of anything.

Its must as useless as Bitcoin from that perspective.

At least silver can be used in Tomahawk missiles.

herkomilchen's picture

Exactly.  Gold is only money because many producers and consumers choose to use it as money.  If they didn't, it wouldn't be money.  Both gold and cryptocurrency are backed by the same thing: consensus it makes for a good medium of exchange.

Budfox18's picture

Gold is money because the BIS says its tier 1 and it trades as a currency on the international market. It is the ONLY commodity that trades as a currency, hence it all must go back to gold eventually. 

RedDwarf's picture

"What backs gold?"

The same thing that backs any form of sound money - the willingless of people to voluntarily treat it as money.

"There is no government backing gold."

Bullshit.  Every major government and all the central banks hold and trade large quantities of gold.

This idea that 'gold' is magical is stupid.  Let's play a game.  Let us assume gold IS money due to rarity and all that.  Then there is a problem.

Gold is only 10x more rare than silver.  So why isn't silver like $130 an oz right now?  Is silver that much more manipulated?  Or is it both.  However platinum is 10x more rare than gold.  Why isn't platinum like 10x the price of gold?  Is it platinum that is so manipulated?  Or is it all 3 now?  If everything's price can be so manipualted that they are off by factors of 10x to 100x then they are useless as 'money' anyway.

If the prices are not totally arbitrary, then gold has a massive premium.  That premium is because in fact IT ALONE is treated as money.  There is nothing magical about gold vs silver or platinum for this role.  The ONLY explanation for this premium is human choice and tradition.  In short, yes it is in fact 'full faith and credit'.  It is literally the faith people have in gold.

Money is a medium of exchange.  That means it is also in effect a network.  Network effects in other words are in play.  There is utility in having one dominant player for a given role within a network, it's why it happens.  Gold won that role, probably because it has fewer utility uses than silver or platinum.

You said it yourself.  "At least silver can be used in Tomahawk missiles."  And solar cells, and medical, and cell phones, etc.  The day silver became too important as an industrial metal is when it stopped being stored by banks.  They stopped viewing it as money.

So here is the kicker.  If gold is only money due to people having faith in it as money due to it's properties (scarcity, fungibility, divisibility, durability, etc), then there is nothing stopping something else from becoming sound money even if it is not physical because it's nothing magical or intrinsic to the gold itself that makes it 'money'.  It is human choice based on it's properties and network effects.

silverserfer's picture

jesus, explaing the value of gold to crypto muppets is like talking about how to garden to a 15 year old while they are playing video games. Waste of time. 

tmosley's picture

Gardens are a pointless waste of time, so yeah, it is an apt analogy.

Vegetables will plummet in price until they are more like flour or sugar in terms of price per calorie as indoor robotic farms come online.

http://boweryfarming.com/

https://www.fastcompany.com/3050750/this-robot-run-indoor-farm-can-grow-...

Technological advance changes the way the world works. Best start getting used to the idea.

RedDwarf's picture

I explained the basis for the value of gold comprehensively and how crypto can also thus have value.  Not only did you not grasp my arguments, you did not even address them or make any arguments of your own.

You, not I, are the one wasting everyone's time here.  You add nothing to the conversation.

Justin Case's picture

There is no debate among central bankers whether gold is money or not. Gold always has been and always will be money in its purest form. It does not degrade, is sufficiently scarce, universally accepted, and is easily divisible into practical units. The foremost quality however is that it bears no counterparty risk. In financial speak, it is unencumbered. This quality ensures it will remain the ultimate insurance for wealth preservation. As such, there is not a reputable central bank in the world that does not hold the asset on its balance sheet with one notable exception – Canada.

According to the World Gold Council, China’s official reserves as of December 2016 sit at 1,842.6 metric tonnes. It is well established that this does not reflect China’s true gold holdings. The statistics for Chinese gold reserves did not update monthly until June 2016. After the great financial crisis, China’s gold holdings suddenly surged and then remained unchanged until mid-2016.

RedDwarf's picture

"There is no debate among central bankers whether gold is money or not."

Some call it a barbarous relic, so yes there is debate.  Secondly I stated that it was a given the banks treat gold as money.

"Gold always has been and always will be money in its purest form."

Gold is literally 'money'?  Even before there was humanity, and after we are gone?  So it is intrinsic to the natural laws of the universe?  I look forward to your scientific proof that gold IS money.

"It does not degrade"

Neither does platinum, nor crypto for that matter.

", is sufficiently scarce"

So is platinum.  Also scarce enough for now.  Just because the element is rare on a cosmological sense does not mean one planet's worth of people will not find massive quantities with improving technology and a whole solar system of resources.

", universally accepted"

That is not a property of the metal.  Now you're conflating social choice and elemental properties.

", and is easily divisible into practical units."

Hardly.  Go ahead, try to shave 1.3758 grams of gold off of a gold bar at the store to pay for something.

"The foremost quality however is that it bears no counterparty risk. "

Also true for silver, platinum, any number of things, and bitcoin as well.

"This quality ensures it will remain the ultimate insurance for wealth preservation."

That is an unprovable and unfalsefiable claim, and as such is just an opinion, not knowledge.

" there is not a reputable central bank in the world that does not hold the asset on its balance sheet with one notable exception – Canada."

You just destroyed your own thesis.  You admit the bank of Canada is a reputable central bank despite not holding gold.

DjangoCat's picture

It needs to be simple.  That's why Bitcoin cash is rising while Bitcoin falls.  Bitcoin Cash preserves the original idea's from Satoshi's white paper.

 

TradingTroll's picture

The Wiltshire 5000 has about 3000 companies in the index. It’s hard work, but this is the game.

red1chief's picture

The bubble is about to pop. Watch out, don't be Isaac Newton! He thought he was smart buying into the South Sea bubble on the way down after it popped, only to go broke...

 

Bitcoin is just another scam to separate fools from their money...

tmosley's picture

That's not an argument though.

Money is always in a bubble.

red1chief's picture

I would rather have fiat currency as a means of exchange. Notice how people talk about "the money I made".  They are hoping to get more fiat out of the volatility, until they run out of fools.

tmosley's picture

"Making money" is an idiom, you idiot. It means "increasing one's own purchasing power".

TradingTroll's picture

And when fiat blows up maybe when the US debt is $50 trillion, then people will say look at all the gasoline/food/housing I bought with my Bitcoin or other crypto.

DEMIZEN's picture

gravity is a bitch. the markets looks extremely uncomfortable. i am shaving 70 pips ranges in forex meanwhile.  crash? i dont think so..

china just posted 15 -20 % annual increase in int trade volumes. own chinese crypto probably a matter of weeks.

The Divided Stoopids of DuhMerica's picture

YES!!!!!!!!!!!!!

OMG to the MOON!!!!!!!!!!!!!!!!!!!!!!!!!

The Divided Stoopids of DuhMerica's picture

YES!!!

NEO to the MOON!!!!!!!!!!!!!!!!!!!!!!!

The Count's picture

Bull Shite Coin throwing another temper tantrum?

Somebody has a divide and conquer plan for BTC.

Greenspazm's picture

"the developers behind the fork of the bitcoin blockchain  said that they would release a formal software client for download at 7:00 PM UTC on Nov. 12. Originally set for a public launch on Nov. 1, the project is backed by LightningASIC, a seller of mining hardware based in Hong Kong, as well as a community of relatively unknown developers."

I thought bitcon was completely decentralized, thus removing the necessity of trust in any third parties, particularly "developers" who are as unknown as "Satoshi Nakamoto" and whose prime objective must be to maximize their own profit.

tmosley's picture

Anyone can work on the bitcoin project. Pay attention.

Jtrillian's picture

People need to remember that markets do not move in straight lines.  There were common fibs near 8k and it got close enough for profit taking to occur.  Look for BTC to bounce near 5k (again, common fib level).  It's likely to be at 10k  bt EOY.

FWIW, not sure how new futures market will affect BTC.  Likely to suppress price of BTC like they do with the gold fix and other market manipulation we have seen in the precious metals markets (see HSBC and DB scandals).  The only way they can keep this market illusion going is to keep the alternatives like PM's and Bitcoin at bay.

 

TradingTroll's picture

It’s a truncated top. The Fib top was supposed to be $8300-8360 as I posted a few days back. Truncations occur often due to resistance from trendlines or news. This time is news. If you look at the depth of the initial v-shaped drop and invert you get $8300. So, as it was done, I shorted the right spike side of the v on Bitfinex. There is I suppose a tiny risk of resurrecting the fork before the end of the Fib time zones but after Nov 14 (end of Fib time) we are down, for now. Could go below $3k. The action might be in other coins for 1-3 months.

Justin Case's picture

Gold-market manipulation, the story that gold has been subject to a long-term price suppression scheme is easily debunked.It's easy to point out that all markets, including the gold market, are manipulated. They always have been and they always will be. Presenting evidence that the gold market is manipulated is like presenting evidence that the Earth revolves around the sun — it's true, but useless information in this day and age.

Evidence of gold-market manipulation is not evidence of long-term price suppression. Yes, if long-term price suppression was evident, then it would be an example of market manipulation, but market manipulation generally does not involve long-term price suppression. I purchased gold for $284.00/oz. That is far below the current manipulated price today. You cannot purchase gold anywhere in the world for $284.00/oz. Does this indicate that the price is being manipulated up?

If you are a PermaBull writing about resource markets, you simply whine about manipulation when everyone who has ever traded any market knows that all markets are manipulated all of the time.

honestann's picture

Gambling on Pet Tulips.

Justin Case's picture

I waiting for my Elmo doll to get back to $1,500.00. Shesh whoda thought the price would drop? If only I knew. There were people fighting for Elmo and most stores sold out faster than they could put them on the shelves. I got lucky that day when the stock boy brought out a new box full. The crowd dove right in and the stock boy fell to the floor. I grabbed a couple Elmos, but a guy yanked it from my hand when I was helping the stock boy up. Too bad, I only bought one, but looking back, the other guy was the loser. I saved $1500.00 thanks to him.

And that's my story and I'm sticken to it. LOL. Now I'm going to mortgage the house and drop $500k into bitcoin on this correction, yahoooo! to da moon Alice!! I'm going to be the next Jed Clampett. See yal in Monaco losers!!

Bill of Rights's picture

Heres a crying towel mosly...

tmosley's picture

You are the dumbest poster on these forums, but do you honestly expect me to believe that you actually think this move upsets me in any way?

https://www.youtube.com/watch?v=Em4-DyiAB2A

Justin Case's picture

You are the dumbest poster on these forums

Don't worry Mostly, he's not going to take yoar title that easily. Yoar the pro!

tmosley's picture

The lion cares not for the opinon of worms.

The Divided Stoopids of DuhMerica's picture

I'm pretty sure TM DOESN'T want your used and stainded towel thanks.

Just go ahead and keep it.

khnum's picture

The blocks from block chain are used to create a virtual reality by AI,the singularity will be reached next week,the Kushner Investment Group,Hanson Robotics and others are going to bring in the next global currency,Sophia the AI robot is now a citizen of Saudi Arabia,Saudi Arabia is where the giant data centre is congratulations yor bitcoin mining has built Skynet.The November 7 Live in Las Vegas with Quinn Michaels show on you tube connects all the dots if interested.

Txpl9421's picture

Really Tylers, you need to get a new thesaurous.

Bitcoin has fallen back to where it was....10 days ago!  Oh my god!

It was going up because of the fork.  Now the fork is off and its going down. 

What a fuckin nightmare.

DjangoCat's picture

Not just up and down, but sideways into BCH.  Bitcoin Cash is being adopted by many businesses who have become disillusioned by Bitcoin's high fees and lack of a reasonable solution.

I think this may become a major move going forward.

JibjeResearch's picture

Morons.. stop trying to trick people... ass clown...

BCC is a derivative of BTC... which is harder to mine... because it was 2MB forked... the shit that BTC is trying to do...

Fucken AssClown

silverer's picture

Yes, Bitcoin acts like a "free market" alright. The problem is, unlike instruments that represent an asset, it represents nothing at all. It's life is going to be permanent volatility, and I'm afraid the problem will manifest itself as manipulation by people who have always manipulated markets, because it doesn't have a real anchor to anything. Invent something that will change its price, and bingo! More rich insiders. At least with a P/E ratio and a document representing ownership of a profit producing company, you are tied to something that's a real physical asset with measurable means to decide value. What is the value of Bitcoin? Anybody? That's the problem. Not tangible, no asset backing. It sure does float around free as a bird. I think when the SHTF, it will all come back to gold and silver. Can you make money with Bitcoin? It seems some people have made a lot of money, due to other people who think they can make a lot of money. It's going to be very interesting in the long run to see where this all lands.

red1chief's picture

Like anythng you drop, it lands on the floor.

Justin Case's picture

it lands on the floor.

Maybe it will just vapourize into nothing, where it came from. So don't be so sure.

tmosley's picture

You have a fundamental lack of understanding of what money is, so it is natural that you can not and will never understand monetary cryptocurrencies.

>it represents nothing at all

It represents a claim on human labor, like all money.

>t's life is going to be permanent volatility

Money is volatile when it has a low adoption rate that is moving quickly in one direction or another. In the past, we have only seen this happen in the opposite direction from bitcoin, which is a phenomenon we call "hyperinflation". It is all explained by the adoption S-curve.

>Invent something that will change its price, and bingo! More rich insiders.

With just a wave of their magic wand.

>At least with a P/E ratio and a document representing ownership of a profit producing company, you are tied to something that's a real physical asset with measurable means to decide value

What are the P/E ratios of gold, silver, and dollars? What real physical assets are they tied to?

>no asset backing

Backing requires a trusted third party. Who are you going to trust to keep the gold that you want to back your currency? The US government!?

>I think when the SHTF

Not going to happen. Also, in places where it HAS happened, silver and gold haven't helped anyone so far as I can tell. Though bitcoin has helped where the electricity and internet stayed on, which is most places.

 

VWAndy's picture

 Dude put down the crack pipe. Really. Other than this bitcoin addiction you seem like a nice guy. Please tell me you aint all in on bitcoin.

tmosley's picture

That's not an argument.