The cryptocurrency market experienced significant turbulence on November 10, 2017, as the fallout from the cancelled SegWit2x hard fork continued to ripple through the ecosystem. Bitcoin dropped approximately 9 percent to trade near $6,500, its lowest level since November 1, after the sudden cancellation of the controversial upgrade sent traders scrambling to reallocate their positions.
TL;DR
- SegWit2x hard fork was officially called off on November 8 by a coalition of six major industry leaders
- Bitcoin initially surged to a record $7,879 before plunging 9% to near $6,500 by November 10
- Bitcoin Cash surged over 40% to approximately $947, reaching its highest level since August 19
- BCH mining became 13.6% more profitable than Bitcoin mining following the hash rate shift
- CME Group is still planning to launch Bitcoin futures by the end of 2017, adding institutional legitimacy
The Decision That Stunned the Crypto World
On Wednesday, November 8, a group of six influential figures in the Bitcoin ecosystem jointly announced the suspension of the SegWit2x hard fork. The decision was signed by Mike Belshe of BitGo, Wences Casares of Xapo, Jihan Wu of Bitmain, Jeff Garzik of Bloq, Peter Smith of Blockchain, and Erik Voorhees of Shapeshift. These individuals had originally met in New York earlier in 2017 to agree on what became known as the New York Agreement, a two-part plan to scale the Bitcoin network.
The first part of that plan, Segregated Witness (SegWit), had already successfully activated as a soft fork in August 2017. The second part, SegWit2x, would have increased Bitcoin’s block size from 1 megabyte to 2 megabytes through a hard fork scheduled for mid-November. However, as the fork date approached, it became clear that the proposal lacked the broad community consensus needed to avoid a contentious chain split.
In their cancellation statement, the organizers acknowledged: “Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together.” This pragmatic retreat from a potentially divisive hard fork raised fundamental questions about how governance decisions should be made in a decentralized ecosystem where no single entity holds ultimate authority.
Market Chaos and the Bitcoin Cash Surge
The immediate market reaction was dramatic and counterintuitive. Bitcoin initially spiked to a record high of $7,879.06 on November 8, driven by relief that a potentially disruptive chain split had been averted. However, by Friday, November 10, the price had reversed sharply, falling roughly 9 percent to trade near $6,500 according to CoinDesk data. Ethereum also declined approximately 4 percent, trading near $307.52.
Meanwhile, Bitcoin Cash — the cryptocurrency that had split from Bitcoin in August 2017 — experienced a massive rally, surging more than 40 percent to approximately $947. This was its highest level since August 19. The CoinMarketCap snapshot from November 10 showed Bitcoin Cash trading at $1,007.42 with a market capitalization of nearly $17 billion, making it the third-largest cryptocurrency behind Bitcoin and Ethereum.
Chris Burniske, author of “Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond,” described the dynamic as “a battle of investors versus traders that were stockpiling bitcoin to get their ‘bitcoin2x dividend.'” With the fork cancelled, those traders pivoted to Bitcoin Cash, driving its extraordinary surge. Additionally, mining Bitcoin Cash became 13.6 percent more profitable than mining Bitcoin, according to data from Coin Dance, as hash rate shifted toward the more profitable chain.
Governance Questions Linger
The SegWit2x episode exposed the tension at the heart of Bitcoin’s governance model. On one hand, the cryptocurrency’s decentralized nature means that no single entity can unilaterally impose changes. On the other, the New York Agreement demonstrated that a small group of industry leaders could effectively shape the protocol’s direction — and then reverse course when community opposition proved too strong.
This dynamic raises important regulatory questions. As governments and financial institutions increasingly engage with Bitcoin — exemplified by CME Group’s planned launch of Bitcoin futures by the end of 2017 — the question of who speaks for Bitcoin becomes more than just a technical matter. Regulators dealing with cryptocurrency-related matters face the challenge of understanding a system where governance is emergent rather than hierarchical.
The CME futures announcement, made on October 31, had already sent Bitcoin to new highs above $6,600. The fact that Bitcoin had risen sevenfold year-to-date demonstrated the growing institutional interest in the asset class. But the SegWit2x drama served as a reminder that even as traditional finance embraces Bitcoin, its internal governance remains messy, contested, and fundamentally decentralized.
Why This Matters
The SegWit2x cancellation was a pivotal moment in Bitcoin’s maturation. It demonstrated that the cryptocurrency’s decentralized governance could self-correct when a proposal lacked genuine consensus, but it also showed how a handful of industry leaders could effectively make or break a major protocol upgrade. As Bitcoin moves closer to mainstream financial integration through instruments like CME futures, understanding these governance dynamics becomes essential for regulators, investors, and anyone betting on the long-term stability of the world’s largest cryptocurrency.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions.