The bitcoin price fell around 12% to below $1800 on Sunday morning amid a major selloff on the broader cryptocurrency market. Rival cryptocurrency ethereum also experienced a steep drop of 22 percent, briefly falling to a seven-week low of $130.26 yesterday. The two flagship digital currencies have since then recovered some of the losses, with bitcoin returning above $2000 in today’s trading.
According to CNBC, experts attributed the decline to a combination of factors, including worries about a potential split in bitcoin and blockchain startups possibly selling the large amounts of ethereum they have raised in the last several weeks. Such startups have raised about $1.2 billion worth of cryptocurrency since the start of the year, with about $600 million raised in the last 30 days. Converting some of that cryptocurrency into fiat money inevitably creates immense selling pressure on the market, especially given the low trading volumes for ethereum.
According to Andreas Antonopoulos, author of "Mastering Bitcoin" and a teaching fellow for the masters in digital currencies program at the University of Nicosia, the decline was due to a pullback after the cryptocurrencies rapid advance over the past two years. In his comment on Twitter he also said that concerns about the bitcoin split "is just a trigger".
The beginning of next month could mark a pivotal moment for the future of bitcoin, with the scheduled activation of bitcoin improvement proposal 148, which could lead to a bitcoin split. If that happens, Coinbase's GDAX exchange said in a blog post last week that it “will temporarily suspend the deposit and withdrawal of bitcoin on GDAX and may pause the trading of bitcoin as well”.
As of 09:51 BST, the bitcoin price stood at $2076.32, rising a 5.32% in the last 24 hours.
Meanwhile, the etherium price stood at $178.76. The cryptocurrency has gained 15.5 percent in the last 24 hours, according to data from US-based exchange GDAX.