Bitcoin Breaches $2,000 as Infighting Threatens Crypto Perch
Bitcoin fell below $2,000 for the first time since May.
(Bloomberg) -- Bitcoin fell below $2,000 for the first time since May amid anxiety its dominant status is under threat.
As enthusiasts consider adopting competing updates to the blockchain technology that underpins the exchange method by the end of July, it has raised the possibility of the cryptocurrency splitting in two. Bitcoin has lost about a third of its value since peaking at about $3,000 last month. Calls for a revamp of the software come as exchanges struggled to keep up with rising volumes while the price almost tripled this year.
Bitcoin isn’t the only one struggling as the two competing camps -- miners and developers -- are facing off over how to deal with increasing transaction times and processing fees. The 30 largest cryptocurrencies have all suffered declines over the past seven days, according to data from coinmarketcap.com. Bitcoin has lost about 20 percent of its market value, while the second-biggest digital coin -- ethereum -- has lost 30 percent.
Cryptocurrency exchange GDAX said it anticipates temporarily suspending bitcoin deposits and withdrawals after the Aug. 1 software update deadline, and may also pause trading.
"In either scenario we will implement safeguards to ensure the safety of our customers’ funds," the exchange said in a July 13 post on its website. "This decision will be based on our assessment of the technical risks posed by the fork, such as replay attacks and other factors that could create network instability."
- Bitcoin fell as much as 14 percent to $1,852.19 in New York, its lowest intraday level on a weekday since May 18.
- Ethereum has plunged by more than half since its June peak, according to prices compiled by coinmarketcap.com.
--With assistance from Yuji Nakamura
To contact the reporters on this story: Cecile Gutscher in London at cgutscher@bloomberg.net, Lily Katz in New York at lkatz31@bloomberg.net.
To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, David Goodman, Dave Liedtka