Bitcoin Price Struggles to Recover Beyond $5,500; Bitcoin Gold Lacks Community Support

Bitcoin Price Struggles to Recover Beyond $5,500; Bitcoin Gold Lacks Community Support

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For the past two days, Bitcoin price has attempted to rise beyond $5,500 several times, often surging above $6,000. Analysts have ascribed the recent decline to the upcoming Bitcoin Gold Hard Fork, and absence of support from the community.

Earlier today, October 25, price of Bitcoin plunged below $5,400, dropping to as low as $5,365 and then, within a relatively shorter period, it bounced back to $5,500. Due to the Bitcoin Gold Fork that is set to occur prior to the SegWit2x Hard Fork on November 16, analysts suggest that Bitcoin price will likely remain around $5,500 until the Bitcoin Gold development team includes strong replay protection.

Bitcoin Gold and its Negative Impact on Bitcoin Price

The Bitcoin Gold Hard Fork was abruptly introduced by Chinese miner Jack Liao earlier this month. Basically, the long-term vision of Liao and the Bitcoin Gold team is to close the gap between ASIC mining and GPU / CPU mining, to decentralize the mining industry.

However, the Bitcoin and cryptocurrency community condemned the Bitcoin Gold Hard Fork, primarily because of its unauthentic, unrealistic idea and also due to its plans to pre-mine the cryptocurrency. In the cryptocurrency market, the concept of pre-mining a cryptocurrency before its launch is not entertained by investors, traders, users, and developers; because it prompts a centralization of funds and supply before the launch. Major cryptocurrencies like Dash were criticized for doing so in the past.

Furthermore, the community has fundamentally opposed the Bitcoin Gold Fork considering its lack of replay protection. Without the protection, Bitcoin investors and holders prior to the Fork will not be able to receive Bitcoin Gold in a 1:1 ratio, as it would put existing Bitcoins in danger.

The Trezor development team explained:

“Bitcoin Gold’s codebase, at the moment of writing, is incomplete. Most importantly, it lacks replay protection. For this reason, TREZOR Wallet will not support Bitcoin Gold yet, as it would endanger your Bitcoins.  As Bitcoin Gold is a Fork of Bitcoin; the transaction format, signatures, etc. will be the same. A transaction on one chain could be copied to the other chain and will be valid, possibly leading to unintended loss of coins.”

Consequently, as a highly regarded Bitcoin developer, Jimmy Song explained, Bitcoin investors have started to sell their holdings and temporarily move on to alternative cryptocurrencies (e.g. Altcoins) to dodge the Bitcoin Gold Hard Fork.

Short-Term Price Trend

The Bitcoin Gold development team declared that they plan to integrate strong replay protection prior to its Hard Fork. However, as leading cryptocurrency exchanges such as Bittrex noted, the codebase itself is not prepared, and most of the Bitcoin Gold codebase has not been tested and audited.

Unless the Bitcoin Gold development team adds replay protection in the upcoming days, the price of Bitcoin will likely suffer as a direct consequence. While analysts like Tuur Demeester predict a similar trend with SegWit2x in mid-November, it is likely that a sell-off will not occur due to the fact that SegWit2x has a replay protection.

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