On November 14th, just as a so-called hashwar was about to begin, bitcoin’s price fell by $1,000 from $6,200 to $5,200.
On the same day, an unauthenticated screenshot begun publicly circulating. A translation of it apparently says:
“I have no intention to start a hash war with CSW, because if I do (by relocating hash power from btc mining to bch mining), btc’s price will dump below yearly support; it may even breach $5000. But since CSW is relentless, I am all in to fight till death!”
Why bitcoin’s price would be affected by his re-allocation of hash isn’t very clear as hash and price don’t have an immediate direct relationship, but do indirectly in profitability considerations.
Profits and costs, however, don’t necessarily have to be immediate, but it may be that in potential preparation for a potential hashwar, they perhaps had to set some funds aside, with those funds perhaps coming from selling BTC.
There are claims that rented hashrate was used and that does appear likely because the combined hash of BCH and BSV was considerably higher than pre-split BCH during the hashwar, while at the same time bitcoin’s hash wasn’t really affected much prior to the price crash.
The crash itself occurred on November 19th, about four days into the hashwar. That’s when bitcoin’s price fell from $5,600 to $4,800. The next day it plunged to $4,000.
During this time, it was 100% – 150% more profitable to mine on BTC than BCH or BSV. Money was effectively being burned.
With the sudden and perhaps unexpected hashwar costs maybe in the millions of dollars, it may be new sell pressure was added to the market, thus the crash.
We do not know if the above statement was actually made or if it is photoshop, so at the time it was kind of dismissed.
You could say for example that the selling on November 14th was because of the above, even if it is fake, but the crash on November 19th lends some credibility to the screenshot, even if it is now denied as fake (it wasn’t at the time).
There was no news that could have explained the price action. You can argue sentiment, but sentiment usually follows price. You could argue the buy the rumor sell the news effect. As in, speculators bought before the fork and then sold just before it on November 14th.
How can November 19th be explained, however? How can a price crash of 50% in just days when all cryptos were at the bottom be explained without some sort of trigger?
The simple explanation is higher supply than demand and that new supply might have been due to the hashwar.
That apparently is now over. BSV has given up any claim. Both chain-splits are now profitable to mine once again. The burning of money and the burning of coins may have now come to an end.