Yesterday’s Announcement That the Contentious Segwit2x Fork Will Not Occur Sent Shockwaves Through the Cryptocurrency Markets
In response to the news regarding Segwit2x, bitcoin suddenly spiked upward from $7500 USD to establish a new all-time high of $7900 USD before an aggressive round of dumping drove the price down to establish support at roughly $7000. After a brief overnight recovery of approximately 5%, the price of bitcoin hovers around 7150 USD after retesting the $7000 support area as of this writing.
The news, however, proved to be catastrophic for many traders who had invested in Segwit2x futures, such as the author of this article who spent $85,000 to purchase 90 futures on Bitfinex.
Segwit2x futures plummeted from approximately $1300 USD down to a low of $150 USD, before bouncing up to the $300 – $400 USD range, according to Coinmarketcap. As of this writing, Coinmarketcap reports that prices have sunk back down to approximately $250 USD. Bitfinex’s BT2 tokens are trading significantly lower at approximately $180 USD. Since the all-time high of approximately $2400 USD on the 3rd of November, Segwit2x futures have lost roughly 90% percent of their value.
After Losing Approximately 80% of Their Value in One Day, Segwit2x Futures Contracts Continue to Change Hands
Mike Belshe’s post stated that the goal of Segwit2x “has always been a smooth upgrade for Bitcoin. Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together.” Belshe acknowledged that Segwit2x had “failed to buil[d] sufficient consensus for a clean blocksize upgrade,” and that “continuing on the current path could divide the community and be a setback to Bitcoin’s growth.”
Segwit2x’s initial bounce was likely driven by traders closing short positions, however, many traders are uncertain as to why market participants are still willing to purchase Segwit2x futures in spite of Mike Belshe’s announcement canceling the fork. One possible reason factoring in could be the mining group Bitpico’s announcement they’ll continue with activation of the Segwit2x fork