Bitcoin’s market share has plunged in just a few months from a dominance of 95% to less than 60% for the first time ever as the first blockchain based currency goes through an existential crisis while facing stiff competition from newcomers such as ethereum.
Just two months ago, bitcoin was side-waying at a comforting 85%, but the SEC’s rejection of the bitcoin ETF seems to have acted as a catalyst for many to jump ship, primarily to eth which at the same time has risen from some $12 to now $75, enjoying a market cap of almost $7 billion, more than bitcoin’s market cap last year and an overall incredible achievement after just two years.
To make things worse, the bitcoin community turned inwards, upping up more than a notch a two years long in-fighting, leading to some chaotic months. Bitcoin Unlimited’s bugs were publicized by a Bitcoin Core developer, opening the first shot in the latest battle of a so called metaphorical civil war.
Emotions began to run high, with accusations and counter-accusations, but that was just the start. Another bug was exploited, and another one. Then Bitmain was accused of “attacking” the network by engaging in ASICs optimizations, followed by revelations they had the ability to shut down some 70% of the network’s hashrate.
At the same time, China moved in, ordering bitcoin exchanges to stop processing bitcoin deposits and withdrawals. After some months now, they still have not allowed them to carry normal operations in a worrying sign that may suggest the order is potentially permanent rather than temporary.
While, at the other side, American banks cut off Bitfinex, probably as punishment for not complying with CFTC’s rules even after they were fined by the agency. They might have been let go in better circumstances, but then the exchange was allegedly hacked of some 120,000 bitcoins, currently worth some $160 million.
On the other hand, focus shifted to ethereum. The platform has facilitated many tokens, with some now in the top ten, including Golem which has gone from $8 million to $200 million and Gnosis which raised some $12.5 million in minutes at a valuation of $300 million.
That’s without mentioning the many other eth related news, including the fact that Germany’s energy giant is now launching hundreds of eth based charging stations for electronic cars. More significant might be the fact that eth’s daily trading discussions now attracts thousands of comments and upvotes, something never seen before.
That means bitcoin is probably facing its most challenging times ever. More challenging than the MT Gox hack of 2011 or 2014, more challenging than the negative reputation given by the mainstream media in an attempt to link it with crime, more challenging really than anything it has ever faced.