Bitcoin and several other major cryptocurrencies—including ripple, ethereum, and litecoin—have tumbled in the past day after a rash of headlines sparked concern about uncertainty among investors and traders.
According to CoinMarketCap.com, bitcoin has slumped about 8% in the last 24 hours, while ethereum is down more than 12%. Ripple, the second-largest cryptocurrency in terms of market cap, has lost 6% of its value, and litecoin has fallen over 11%.
One story causing frustration in the cryptocurrency community relates to a so-called “fork” of bitcoin, bitcoin cash. Bitcoin cash originally split from the world’s top crypto in order to alleviate certain barriers to entry and make the digital asset easier to use, but now, the fork has run into its own problems.
Bitcoin cash developers and miners have clashed about the coin’s future. Bitcoin ABC, a developer group that has served as a de-facto leader for Bitcoin Cash, recently proposed upgrades to the coin’s network that would include reordering transactions to increase capacity.
This proposal was met with disagreement from Bitcoin SV, a newer group jousting for control of bitcoin cash. Bitcoin SV suggested restoring retired code from the original bitcoin protocol and increasing bitcoin cash’s block size—moves which it argued fit better with the vision of bitcoin creator Satoshi Nakamoto.
The clash between Bitcoin ABC and Bitcoin SV eventually resulted in a “hard fork” of bitcoin cash and the creation of two new coins named after the competing groups.
The bitcoin cash fork has created an uncertain future for the popular network, which itself was created to solve headaches associated with the original bitcoin. But this disagreement also speaks to the unpredictably of the entire concept of cryptocurrencies, and that has created volatility which has seeped into the broader crypto space.
Despite growing acceptance of cryptocurrencies and rising interest in the blockchain technology that powers them, these virtual assets are still searching for credibility in the traditional finance world.
KPMG last week published a report that warned investors about using bitcoin as a tool to store value. The accounting behemoth said that cryptocurrencies still need what it calls “institutionalization” in order to prosper.
“More participation from the broader financial services ecosystem will help drive trust and scale for the tokenized economy and help the crypto market grow and mature,” wrote KPMG.
There was some progress on this front in the past year, with fintech giant Square SQ adding bitcoin support to one of its apps and Goldman Sachs GS reportedly expressing interest in the industry, but much more institutionalization is likely needed to increase adoption and smooth out volatility.
Bitcoin is now more than 70% off its highs reached last December. The Bitcoin Investment Trust GBTC just touched a new 52-week low of $5.34.
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