Bitcoin may soon rally back to regain all of its losses as a group of mining pools have signaled an early adoption of Segwit2x as its launch date draws nearer.
Last week was a bad one for crypto investors as Bitcoin, Ethereum and every other cryptocurrency depreciated, losing a substantial amount of their market caps.
Bitcoin fell below the $2,000 mark to around $1,863 (38% off its all-time high) while ethereum depreciated to about $133 (67% off its high). Coindesk says the overall market cap for digital currencies fell from $115 billion to $61 billion in a month last month.
Although bitcoin and ethereum, by a large distance, is the biggest cryptocurrencies in the market, they weren't the biggest losers last week. Several other coins depreciated by a larger percentage than the duo.
Looking at things closely, it seems the crash in the crypto market was triggered by bitcoin's depreciation, although there is no clear reason why. A theory which tries to explain this blames the feud between bitcoin's community members. Bitcoin is seen in many quarters as the only cryptocoin out there. Any uncertainty about its future will cause investors to lose faith in the future of other coins and start withdrawing their funds in panic.
Bitcoin analyst Anupam Varshney presented another theory for the price drop. He blamed a recent spate of "Initial Coin Offerings" which flooded the market with bitcoin and ethereum. According to him, some founders blockchain companies raised huge amounts of both coins and then dumped some of their windfall on the market.
Nevertheless, bitcoin's depreciation is not as bad as feared and some veterans noted that the coin still has an overall appreciation year on year.
"If you only cared about crypto/blockchain when prices were high, and ICOs were hot, you probably don't really care about crypto/blockchain," Adam Ludwin tweeted.
Also, bitcoin bounced back on Monday and is going to end the week on a high after the torrid weekend, gaining nearly $1000 to rise above $2900. It's unsure if this rally will continue throughout the week and everyone is expecting the market to be volatile for the next few days.
And as investors, their heart in their mouths, wonder if they should hold or dump their coins, there seem to be some good news. A group of miners has signaled an early adoption of Segwit, the new software update, which many predicted could cause bitcoin to be split into two separate versions.
As at Monday, about 43% of bitcoin's miners - AntPool, BitClub, Bixin, BTC.com, and BitFury – said they support Segwit, and other mining pools may join soon. Slush Pool, another miner which oversees about 5% of the hashrate, indicated that it would soon join the wagon.
The software release is due on July 21st, and the events unfolding after then and August 1st will determine if bitcoin will be highly volatile or not.
According to CoinDesk, mining pools have started inserting little snippets of code in each block that they mine to signal for Segwit2x, although it remains unclear what the state of the code is. However, there is no way one can tell if all of the mining pools are running the code at the moment.