Popular cryptocurrency Bitcoin plummeted on Wednesday, crossing below the $6,000 mark for the first time in more than a year. According to a report from CNBC, the coin dropped by 7 percent and is currently worth $5,640.36, the lowest its been in 2018. The sudden fall was unexpected by many experts, as the coin’s value has been more or less stable over the past several months. With this new low, some analysts expect Bitcoin to sink further to around $5200, according to a report from Market Watch.
“After the recent attempt to clear $6,500 bitcoin has lost all its momentum and now we are seeing some very bearish signals,” said Think Markets UK’s chief market analyst Naeem Aslam while speaking to Market Watch.
While Bitcoin is the most popular of the cryptocurrencies, other smaller coins performed considerably worse than their big competitor on Wednesday. Both Ethereum and XRP, two other popular cryptocurrencies, experienced double-digit losses. Ethereum, the second largest coin after Bitcoin, lost 13 percent, and XRP dropped by 15 percent. With the widespread declines throughout the crypto world, analysts believe the entire coin market cap shrunk by $15 billion on Wednesday, according to CNBC.
One possible reason for the crash and huge selloff is the impending fork of Bitcoin Cash, which is a separate coin from Bitcoin. According to a report from Business Insider, Bitcoin Cash will experience a significant software update on Thursday due to a schism between the coin’s two leaders. Bitcoin Cash is currently the fourth largest cryptocurrency available, right behind XRP, and is valued at $444.21 at the time of this writing.
“Both [leaders] are advocating a different version of Bitcoin Cash,” said senior market analyst for eToro Mati Greenspan, according to Business Insider. “The end result will most likely be a split in the network resulting in two different versions of Bitcoin Cash when both upgrades go into effect this Thursday.”
Not everyone is all doom and gloom about the situation, however. According to CNBC, Brian Kelly, the founder and CEO of currency investment management firm BKCM said in an interview that the current rift in the cryptomarket is likely to be “short-lived.” Kelly also called the current situation at Bitcoin Cash a “civil war,” but expected the volatility in the market to subside after the fork.
“I think it’s probably an opportunity,” said Kelly. “In fact, we did some buying at my fund today [Wednesday].”
However, Kelly also issued a warning for potential investors to exercise caution before leaping into the coin market.
“If you don’t understand what a ‘hard fork’ is, do not jump into that pool right now,” he said “It is the deep end.”