Crypto Markets Digest : Oct. 19th, 2017

What happened this week in the cryptocurrencies market?

After a strong week of rise, cryptos have suffered a major correction, especially strong for ETH.

ETH

A hard fork on the Ethereum network happened on Monday 16th October 2017 at approximately 1AM EST. Expectations were high, as a few bugs were discovered on the Geth client just a few days before the 1st upgrade of Ethereum Metropolis, exposing the network to Denial-of-Service attacks.

Surprisingly enough, the fork didn’t generate a major price upside, which is either a sign that markets had already priced the fork or are still hesitating on the quality of the upgrade. 
Everything didn’t go as smooth as planned though. At the time of press, only 45% of the nodes on the Ethereum network have updated their software to the new version. Furthermore, Gavin Wood expressed his concerns to CoinDesk and “urged caution to any major players taking on large-scale projects until the upgrade is deemed to be fully stable”. 
Vitalik himself said that it would take 1 to 2 months for Byzantium (the new version of Ethereum) to be fully secure. So far, so good : no bugs have been discovered since the hard fork (as of 10/19/2017)
From the Ethereum core development team: next updates should be smoother.

On a positive note, Ethereum Enterprise Alliance has added 48 new members including HP Enterprise and Sberbank (Russia’s biggest bank).

BTC

Bitcoin has reached all times high this week, and has been particularly resistant, especially after the UBS and Putin public denouncements of Bitcoin as a currency.

Our sentiment is that people are playing the Bitcoin Gold (BTC) trade now more than ever. On Oct. 25th, BTGs will be airdropped to BTC owners, just as what happened for BCH on Aug 1st, 2017. The days following Oct 25th should be ugly…

Another fork is happening in early November, the much debated SegWit2X (S2X) fork. 
In ordre to resolve BTC’s block size issue, SegWit (short for segregated witness) was implemented on the Bitcoin core blockchain as a way to store the block data more efficiently while still keeping the 1MB limit on block size. SegWit2X wants to keep SegWit and increase the block size to 2MB.

The main criticisms made on S2X are twofold: 
1) It doesn’t add a technological value, it’s just a mix of two solutions. Reminder: BCH was implemented to tackle the block size issue with a 8MB block size.
2) S2W was not endorsed nor put forward by the bitcoin core dev team.

The debate is on what bitcoin core is going to become (either the current version or the S2X one).

A group of latin american BTC businesses and entities issued a joint letter expressing ‘deepest concerns’ over SegWit2X. Last week, the same statement was published by South Korea’s largest exchange. On Oct 6th, 2017 Bitcoin.org announced it would be “denouncing” the S2X hardfork and the companies involved with the project by publishing a banner on every page of the website which would explained the “risks of using services” associated with the technology.

Given the massive backlash, B2X (Bitcoin S2X) will probably be considered as an altcoin by major exchanges and mining pool, while the current version of BTC should remain Bitcoin core.

Altcoins

BCH: Increase in price early this week due to the opening of BCHKRW currency pair trading in South Korea, resulting in increased flows.

XRP: Increase linked to the Swell conference (7 week high at the beginning of the conference), correction since then.

NEO: Neo should be the currency to watch in the coming weeks. After the end of the Chinese elections, more decisions will be taken in regards to the ICO ban and crypto currency exchanges. NEO being the biggest Chinese crypto, we see a bright future for them.