November 12. Bitcoin lost 25% in price, top cryptocurrency exchange crashed several times, transaction fees spiked up to $20, top miners abandoned BTC, people couldn’t move their funds because transactions stuck in mempool, crypto market saw huge panic sales and massive capital moves, trading volume skyrocketed, mass media spread news that Bitcoin bubble is about to burst.

What happened?

It was a revolution that cryptocurrency community has never seen before.

A well-coordinated attack on Bitcoin (BTC) chain from Bitcoin Cash (BCH) community. Both sides reasonably claim that their chains are the most congruent with the original vision of Satoshi Nakamoto (creator of bitcoin). You can read about their difference here.

Last two weeks were crazy and it was hard to keep track of all news appearing on cryptopanic. In this article I’ve decided to put all major events together in a chronological order so we can see a broader picture.

Full chronics

Nov 9, 3:14 UTC

Rick Falkvinge (founder of the Swedish Pirate Party) publicly supported Bitcoin Cash (BCH).

More interesting is that CEO of Blockstream, a company behind original Bitcoin (BTC), Adam Back also retwitted it. I’m still confused about this move because he doesn’t look like a Bitcoin Cash (BCH) supporter.

Nov 10, 19:25 UTC

Bitcoin Cash (BCH) became extremely popular on Korean exchanges with $2.5 billion daily trading volume.

Main theories:

Blockstream, a company behind original Bitcoin (BTC) has high influence only in English-speaking world, thus Asian market naturally moved to a currency with low transaction fees and similar brand name.

Chinese miners were pumping Bitcoin Cash (BCH) on Korean exchanges, because all their own exchanges were closed by the government in September.

Nov 11, 06:34 UTC

Bitcoin Cash (BCH) gained 46% in a day and a few times went above $1000.

Nov 11, 15:57 UTC

Early bitcoin developer and Satoshi Nakamoto’s confidant Gavin Andresen endorsed Bitcoin Cash (BCH).

Nov 11, 23:37 UTC

Max Keiser (journalist from RT) criticized Bitcoin Cash (BCH).

November 12, 2017

Nov 12, 01:30 UTC

Mike Belshe (CEO at BitGo) stated that original Bitcoin (BTC) transaction fees jumped up to almost $20.

According to some theories Bitcoin (BTC) network was under a spam attack.

A few days later there will be an interesting analysis claiming that there were no spam attacks, but people were massively moving their funds trying to exchange falling Bitcoin (BTC) for rapidly growing Bitcoin Cash (BCH).

(1,5 hour later)

Nov 12, 03:13 UTC

Andreas M. Antonopoulos (famous bitcoin public speaker) took a neutral position inviting both camps to focus on work, rather than fighting and feeding the drama.

(44 mins later)

Nov 12, 03:57 UTC

Bitcoin Cash (BCH) skyrocketed to $1780 and thus overtook ethereum by market cap and became the second largest crypto currency with almost $30 billion market cap.

Vitalik Buterin (Ethereum co-creator) officially endorsed Bitcoin Cash (BCH).

(Two days later he will explain his viewpoint.)

(2 hours later)

Nov 12, 06:13 UTC

One of the main Bitcoin Cash (BCH) leaders Roger Ver transfered 25k BTC (~$150 millions) to presumably Bitfinex exchange.

Main theories:

Roger wants to sell 25k BTC (~ $150 millions ) and pump BCH.

) and pump BCH. Roger publicly shows intentions to sell 25k BTC, so others start a panic sale “before the dump”, which might not happen.

Roger is sidetracking attention to Bitfinex with just 25k BTC, while main trade will happen on another exchange. His low estimated capital is 100k BTC (~$600 millions) up to 300k BTC (~$1.8 billions) by other sources.

In any case it was a very strong market signal and some people called it a market manipulation.

(There will be many events for the next hour so it’s hard to be 100% accurate on timing)

Nov 12, 06:34 UTC

For less than 2 days original Bitcoin (BTC) lost almost 25% in price and finally crashed to $5,616 first time since October, 25.

At the same time Bitcoin Cash (BCH) experienced a massive pump and gained more than $20 billions market cap in less than 2 hours with approximately $2,800 price at its pick. Its hard to determine what was the highest price because everything happened so fast that different sources have very different numbers and very different graphics.

Nov 12, 06:45 UTC (approx)

Around that time Korean exchange Bithumb, the biggest cryptocurrency exchange in the world by trading volume, crashed exactly when Bitcoin Cash (BCH) was at its ATH (all-time high) of $2,800.

Shortly after that the price fell down by almost 50% in just 20 minutes.

Nov 12, 07:00 UTC

Despite a massive dump that already happened a few minutes ago, someone put a wall on Kraken exchange to buy 12,000 BCH for 6,000 BTC (~$35 millions at that time), so the price didn’t go down for the whole hour. That was something you never see for top crypto currencies with a market cap above $20 billions.

That buy-wall created an enormous opportunity for arbitrage so people could buy BCH for USD, sell it into the wall for BTC, then exchange for USD with a good profit and repeat. However, Kraken was working extremely slow during that time because of a huge traffic spike (and may be DDoS attack), so it took a whole hour to eat that wall.

Why did a whale (very rich investor) put that buy-wall for?

Well, according to most theories it was a huge mistake and he lost half of his money due to panic, FOMO or serious Kraken lags. However, I can clearly see at least one scenario in which a whale could make a huge profit using some wash trade techniques and was selling his BCH to fish for enormously high price for a whole hour. The explanation is too big so you can read about all theories in a separate article here (coming soon).

What can we state for sure is that after a huge pump there was even a bigger dump that exploded like a bomb and spread massive panic on the market. Price was swinging up and down like crazy. People were gaining and losing capitals in just minutes, especially those who used margin trade.

Nov 12, 07:00 UTC (approx)

Michael Novogratz, a billionaire and Fortress ex-hedge fund manager, claimed that he bought around $20 million worth of Bitcoin (BTC) at its dip. That helped stop the panic sale and since main Bitcoin Cash (BCH) legions were offline due to Bithumb’s crash, BCH didn’t have any support to continue the fight, so people started massively move their funds back to BTC.

Oversimplified explanation for Bitcoin (BTC) chart can look like this:

(Next day Michael Novogratz will explain his position.)

Later Korean exchange Bithumb will reopened again, but the price will be approximately 700,000 KRM ($640) lower despite having no trades during the down time.

Two days later customers of Bithumb will start preparing a collective lawsuit against the company and police will visit its office.

Main theories:

Bithumb’s servers were overloaded with traffic, because people were rushing out to exchange BTC for BCH, thus it crashed.

There was a serious DDoS attack on Bithumb (and on other exchanges) that crashed servers to save original Bitcoin (BTC) from flipping.

There was a serious hacker attack on Bithumb to exploit some potential security vulnerability and steal money.

There was a massive amount of deposits and withdrawals while BTC mempool was overloaded and transactions stayed unconfirmed for hours, so Bithumb closed during rush hours to avoid legal issues.

Bithumb intentionally disabled access to gain the profit from an insane Bitcoin Cash (BCH) arbitrage by itself (very unlikely version, but possible).

And there were many small posts, news and tweets that other exchanges also suffered a few outages during those pick hours, as well as big public cryptocurrency owners were complaining about hacker attacks on their accounts.

For the rest of the day the price of Bitcoin Cash (BCH) will jump up and down for around 50%.