Motley Fool Australia » Investing » Bitcoin crashes: Here’s what you need to know

I think it is fair to say that it has been an eventful few days for the Bitcoin price.

At the time of writing the cryptocurrency is fetching US$5,793 according to CoinDesk. This is a decline of approximately 25% since Wednesday when it was as high as US$7,721 per coin.

What happened?

Over the weekend the Bitcoin price plunged as low as US$5,507 before recovering slightly amid disagreements about the future of Bitcoin among digital currency developers.

These disagreements relate to an upgrade called SegWit2x which was called off last week just days before it was supposed to take place. The upgrade had been proposed as a way of improving Bitcoin’s transaction speed and cost, but support of the upgrade has softened in recent weeks.

Despite all the talk of Bitcoin being the future, it is relatively slow and archaic in comparison to newer technologies such as spin-off and rival cryptocurrency Bitcoin Cash.

Unsurprisingly, Bitcoin Cash has been the biggest winner of the SegWit2x cancellation.

The price of Bitcoin Cash rocketed to a record high of US$2,477 at the weekend, before profit taking from traders subsequently drove its price almost 50% lower by Sunday night.

Where next for Bitcoin?

That’s the million dollar question. Though if history repeats itself yet again, it is quite likely that the cryptocurrency will be at another record high in the next few weeks.

Sell-offs like the one we have seen at the weekend appear to bring more traders to the table, eager not to miss out on another run higher.

But I won’t be investing any hard-earned money into Bitcoin just yet. Although it could quite easily prove to be a great way of making a quick buck, I’d rather invest in high quality tech shares such as Nextdc Ltd (ASX: NXT) and Altium Limited (ASX: ALU).