The Market Plunge
On November 15, 2018, Bitcoin's price plummeted below the critical $6,000 psychological threshold, hitting a yearly low of $5,544. This crash erased over $30 billion from the total cryptocurrency market capitalization within 24 hours, sending shockwaves through investor communities.
Key factors driving this collapse:
- The Bitcoin Cash (BCH) hard fork conflict
- Intensifying "hash rate war" between major players
- Waning market confidence after prolonged bearish trends
Understanding the BCH Hard Fork
What is a hard fork?
When a cryptocurrency community splits due to technical disagreements, it creates a new blockchain branch—like a tree fork—resulting in a new coin.
The BCH conflict originated from competing visions:
- Bitcoin Purists (led by Craig Wright):
Focused on maintaining BCH as a payment-focused system with larger block sizes - Infrastructure Builders (led by Jihan Wu):
Advocated expanding BCH's functionality for broader applications
The Hash Rate Warfare
Post-fork, the battle evolved into a costly "hash rate war":
- Both sides deployed massive computing power to disrupt each other's networks
- Tactics included creating invalid blocks to destabilize transactions
- The conflict required enormous financial resources to sustain mining operations
Why this matters for Bitcoin:
With major players holding substantial Bitcoin reserves, their conflict triggered widespread market panic, exacerbating Bitcoin's price decline.
Market Realities
Underlying structural issues surfaced:
- Overall cryptocurrency market capitalization had been declining since early 2018
- Many altcoins became virtually worthless or illiquid
- Bitcoin's relative dominance rose from ~30% to >50% of total crypto market value
Core problem:
The market lacked sufficient capital to sustain previous price levels, with new investments drying up.
Frequently Asked Questions
What caused Bitcoin's 2018 price crash?
The immediate trigger was the Bitcoin Cash hard fork conflict, but underlying issues included waning market confidence and insufficient capital inflow.
How does a hash rate war work?
Participants use massive computing power to disrupt opponents' blockchain operations—often through creating invalid blocks or transaction bottlenecks.
Will Bitcoin recover from such events?
While Bitcoin has shown resilience historically, recovery depends on broader market conditions, adoption trends, and regulatory developments.
What's the difference between BCH ABC and BCH SV?
BCH ABC (led by Wu) prioritized expanded functionality, while BCH SV (led by Wright) focused on preserving payment-focused simplicity.
How long do hash rate wars typically last?
These conflicts can persist for weeks or months, depending on participants' resources and willingness to sustain losses.
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