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Bitcoin Price Returns Below $2,600 on Renewed Fork Fears

July 25, 2017 at 15:43 by Yahia Barakah

The price of Bitcoin crashed on Tuesday to return below $2,600, after trading around $2,800 over the past few days. The price crash appears to stem from renewed concerns about a possible split in the Bitcoin network that would create two different and independent currencies.

On Friday, Bitcoin managed to avoid the split, which is commonly referred to as fork, after its network supported an upgrade to the virtual currency’s software. The software upgrade, which miners and traders call Improvement Proposal 91, enhances the network’s ability to process transactions amid a surge in transaction numbers in recent months.

The support from miners on the Bitcoin network exceeded the 80% threshold that was required for the activation of the upgrade, resulting in a surging buying demand for the digital currency. However, Bitcoin lost more than 9% today as Bitcoin Cash announced that it would go ahead with a fork, which raised worries of degenerating investor confidence if a split ended up happening.

Bitcoin Cash is a group of miners and Bitcoin users that support a proposal that would bring a different solution than Segregated Witness that the Improvement Proposal would bring. While Segregated Witness would double the maximum number of transactions on the Bitcoin Network, the proposal from Bitcoin Cash aims to increase the limit 8 times.

The Bitcoin Cash group chose August 1 to be the day for its split from the Bitcoin network. What happens after the split will depend on miners, whose support will be vital to keep Bitcoin Cash alive. The value of Bitcoin Cash against Bitcoin will judge the market’s support for the new rival, but for now concerns of the fork appears to weigh on the price of Bitcoin.

BTC/USD traded at 2,588.6 on the Bitstamp exchange as of 15:20 GMT on Tuesday from 2,516.0 at 13:00 GMT, the pair’s weakest level since July 20. BTC/USD began trading today at 2,759.9.

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