Market observers expected hot money to flow from Bitcoin to altcoins after the Segwit2x hardfork was cancelled. Instead, the entire altcoin market seems to have crashed along with Bitcoin, while Bitcoin Cash surges by 55% to reach $992.
Bitcoin takes the crypto market down
If altcoin backers hoped that the cancellation of Bitcoin's November Segwit2X hard fork would result in the prices of altcoins increasing, they were sadly mistaken. The crash in price of Bitcoin (down $1,300 in the last two days) has been accompanied by almost altcoins crashing. Out of the top 40 cryptocurrencies by market cap, only Bitcoin Cash, Ethereum Classic and Dash have posted gains in the last 24 hours. People who were short Bitcoin and long altcoins were only half right.
Big blockers vs small blockers
The divide in Bitcoin was apparent a long time before the Bitcoin Cash fork was created and before Segwit2X was envisaged. The community is split on the issue of blocksize – between those who believe small blocks are essential to maintain decentralization and those who believe that larger blocks are necessary for Bitcoin to scale.
The large blockers seem to have been split between the Bitcoin and Bitcoin Cash camps, with those in the Bitcoin camp pinning their hopes on the implementation of Segwit2X and the blocksize increasing to 2MB. With the collapse of Segwit2X, the Bitcoin Cash camp seems to have been strengthened, increasing its price.
Vinny Lingham tweeted to indicate that the move might be happening:
Too early to say, but @adam3us & @eric_lombrozo did recommend that those who didn’t support Layer 2 scaling should move to Bitcoin Cash. I guess that’s happening now…
From zero to $16 bln in three months
Bitcoin Cash was created on August 1 and its market capitalization has zoomed to $16 bln in three months. Bitcoin Cash is now more valuable than Twitter, which currently has a market cap of $15 bln. After an initial crash, Bitcoin Cash has recovered sharply and seems to be uniting those who want Bitcoin to scale through big blocks. It is fast closing in on Ethereum, which has a market capitalization of $28 bln. Ethereum backers expected it to overtake Bitcoin in market cap (the "flippening"), but now have to worry about Bitcoin Cash overtaking Ethereum.