Ready for the Bitcoin Cash Crash?
Ready for the Bitcoin Cash Crash?
The fledgling Bitcoin Cash market is trending toward $600. How does it compare to “traditional” Bitcoin, in a week where actual “hard” Bitcoin prices are in decline?
Bitcoin Cash, is a relatively fresh digital asset category deemed to be an alternative to Bitcoin, which was trading $Four,227 on Thursday, according to CoinDesk’s Bitcoin Price Index. According to CoinDesk, the upstart Bitcoin Cash, which was formed following a Bitcoin fork on August 1, is coming on swift.
Bitcoin Cash has now attracted almost 30% of the mining power of the Bitcoin network, a figure that is up from just 5% a few days ago.
Bitcoin Cash was trading near $1,100 on Friday, August Eighteen, 2017, and its rapid price rise and unexpected decline are considered big issues for a fresh Bitcoin trading category only a few weeks old. On Thursday afternoon, it was trading at $618.
“There is a reason why Bitcoin Cash rose so significantly – Jihan Wu of AntPool, the largest Bitcoin mining pool in the world, announced their support for mining Bitcoin cash,” says John Monarch, a cryptocurrency experienced and CEO at Direct Outbound Services LLC, Greenville, S.C. “This was a big deal simply, because it meant more verifications processed, and better speed of transactions for Bitcoin Cash.”
Both Bitcoin trading categories are worth watching, but Monarch personally considers Bitcoin Cash more of a brief term speculative play. “As adoption in the real world is near-zero presently, Bitcoin itself has a much stronger and larger community of users and businesses,” he says.
“It’s dangerous to say Bitcoin prices are in decline, as after the creation of Bitcoin Cash,” Monarch adds. “Bitcoin itself rocketed up from the mid $Two,000s, all the way to over $Four,000. This is simply daily fluctuations in an unregulated market, which will practice much wilder swings than traditional investors and traders are used to.”
Some digital asset investors are taking Bitcoin Cash on a “wait and see” basis.
“Bitcoin Cash is a fresh market and many traders were looking to see if it would trade with or against traditional Bitcoin,” notes Marty Yavorcik, founder of swapper.io, in Youngstown, Ohio. “All signs tend to indicate that it trades against. In other words, when funds pour into Bitcoin Cash, they are either not buying into regular Bitcoin, or the money is leaving Bitcoin for Bitcoin Cash.”
Industry growth is a key issue for Bitcoin Cash, which Yavorcik says was created specifically to “the perceived need for larger transaction blocks and lower transaction fees.” But when you look at the blocks they are actually mining, those blocks are not utter and the utility of it is yet to be determined,” he says. “The reality is that Bitcoin cash is all speculation.”
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Yavorcik advises digital currency investors looking for viable alternatives to concentrate on Ethereum. “It tends to trade with regular Bitcoin and overall is an titillating platform due to the amount of development in the space,” he says.
Widening the lens, anyone who claims to know exactly what’s going on with either Bitcoin trading platform is off the mark, others say.
“It’s often unlikely to tell why Bitcoin trends and everyone who claims to know, is guessing,” says Mihir Magudia, executive director of the U.K.-based LEOcoin Foundation, a nonprofit that promotes the altcoin LEOcoin. “The industry is not yet mature enough to rise and fall based on logical or lightly explainable reasons.”
Often, the value of a coin will rise, because it is rising, and then proceed to rise simply because it’s continuing to rise, Magudia states. “There is nothing technological that a Bitcoin can do at $Four,000 each that it cannot do at $400 or $8,” he notes. “We are still in the early days of the digital currency revolution. The size of the market, while large in cash terms, is petite when compared to the trading a major stock exchange. There are very few coins which are able to claim stability or safety for investors looking for a secure rate of comeback.”
“At this point, significant investors still have the power to use their financial muscle to budge the market in any direction that they choose,” Magudia adds. “This may have already happened several times in Bitcoin’s history and it may be happening right now with Bitcoin cash.”