Bitcoin has been immersed in a number of arguments regarding scalability and transaction cost solutions for a number of years. After falling to reach a widely accepted solution, a spin off group creating the New York Agreement. The group, which contained industry stakeholders such as Coinbase, Shapeshift, and Jaxx claimed to represent 58 companies located in 22 countries and to account for 83.28% of hashing power.

Unhappy with a lack of developments, the group decided to press ahead with implementing a hard fork that would create a version of Bitcoin that implement Segregated Witness (SegWit) and increased block sizes from 1MB to 2MB. The fork was scheduled for mid-November 2017, and the potential for the creation of a “new Bitcoin” attracted some of cryptocurrency’s boldest speculators.

BT2 Futures

Exchanges such as Binance, Bitfinex and, HitBTC opened up futures markets, which allowed for the trading of Chain Split Tokens, or futures that were linked to the creation the SegWit2x version of Bitcoin. Futures contracts are traditionally a way of agreeing to buy or sell a certain quantity of a particular product at a specific price on a future date. Traders are actually trading ownership of an asset in the belief that they will benefit from a beneficial price development. Bitcoin futures involve trading ownership of an asset that does not yet actually exist, and is not guaranteed to ever exist, so the whole process is extremely risky.

Despite this fact, there were a few crypto traders who were happy to take part in speculating on the BT2 futures tokens and BT2 made its way on to the market at the end of October opening up at a price just over $800 and generating around $1.5M worth of daily trades. Throughout October, BT2 generally traded at around the $1000 mark and experienced a 24-trade volume close to $500,000, on October 29 there was a flurry of activity, which saw the trading volume spike at $7.5M.

The first week of November saw BT2 increase steadily in price, with tokens trading for between $1100 and $1200. The token reached a peak price on November 3, when it traded for around $2300 before falling back to just under $2000.

Sudden Change

Something that BT2 speculators were not concerned about was the aggressive, contentious nature of the SegWit2x fork and the way it would be perceived by the community. The fork would split nodes, users and developers, across two separate chains and the proposed 2x coin was not equipped with replay protection. This would allow for significant losses across the network, as users were open to replay spending, replay attacks and losses due to operating incompatible software.

As we have seen, the greater community could not support an action that would cause severe damage to the reputation and goodwill that Bitcoin has developed since 2009. The New York Agreement was also made up of profit-oriented organizations that could not survive if the network was terminally affected.

This resulted in the cancellation of the SegWit2x fork and a futures market that immediately bottomed out. Before the news broke yesterday BT2 was still trading at around $1200 to $1300, however, once the cancellation was confirmed, the price crashed to around $200 with BT2 losing over 70% of its value.

It’s difficult to know just how many traders were involved in the BT2 market, but up until the news, the token was still generating around $750,000 worth of trades. The price crash has left BT2 holders severely out of pocket which traders who took up significant BT2 positions losing the vast majority of their money.

Trading in cryptocurrency futures is extremely risky and it must be remembered that traders must offer up cryptocurrencies that they own, to trade a token that may never exist. Traders purchased BT2 expecting it to be transferred into B2X, the SegWit2x version of Bitcoin. This never took place, and speculators must remember never to put in more than they are willing to lose.