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The price of Bitcoin has been hanging around the $5500 mark over the past two days following a dramatic drop midweek, nearly 14%, from around $6500.
What's Behind the Drop?
The fall is being blamed, at least partially, on a planned Bitcoin Cash hard fork.
From MarketWatch:
On Thursday, the fourth-largest digital currency, Bitcoin Cash BCHUSD, -4.70% was set to hard fork and split into two currencies. The move has divided the cryptocommunity with no clear consensus, TKTKwhich coin with attractTKTK the majority of miners and computing power. “This drop in price is more than likely due to upcoming hard fork scheduled by Bitcoin Cash,” said Marcus Swanepoel, co-founder and CEO of Luno, a cryptocurrency trading wallet.
“The Bitcoin Cash blockchain has been undergoing scheduled hard forks every six months to upgrade and improve the protocol. In most cases, these hard forks are uncontested with the whole community supporting them. In this case, however, consensus couldn’t be reached with two factions emerging, and proposing different solutions for the upgrade.”
Not Just the Fork
Market Watch also noted that, as volumes have fallen, the pace of the decline suggests adoption of digital currencies has stalled.
“The speed with which cryptos crashed Wednesday indicate that there is very little fresh money, buying interest in the market and that stops were limited in size,” said Nick Cawley, markets analyst at Daily FX.
Industries like legalized marijuana and online gambling, which struggle utilizing traditional banking, have helped boost the usefulness of cryptocurrencies like Bitcoin.
Good Things Ahead for Online Sports Betting Sector?
Bitcoin now accounts for upwards of 70% of online gambling transactions in the North American market as well as dozens of other so-called "restrictive" markets across the globe.
Bookies and Pay Per Head agents have also benefitted greatly from the emerging cryptocurrency market.
It’s all about cash flow. Pay per head agents that use fiat currency have more trouble making payouts and collections. Their clients have more trouble making deposits.
Cash doesn’t flow as easily through an agent’s sportsbook business that relies on fiat currency.
Without cash flowing easily, bookies end up depositing more money into their accounts to pay their business expenses.
Cash is king. The way it remains king is for it to flow through a business.
Cryptocurrencies like Bitcoin allow for the flow to continue no matter the fiat currency. Bitcoin has become universally accepted in the sportsbook industry. This means most every fiat currency backs it up for the purposes of using Bitcoin for sportsbook transactions.
- Aaron Goldstein, Gambling911.com
