by David Drake
Bitcoin emerged in the financial marketplace seven years ago as an ideal alternative to the control and uncertainty of centralized economies. It was the first digital currency in the cryptocurrency market and, compared to others that came later, was considered the crème-de-la-crème. It boasted a trading price that started at $0 and quickly reached $650 in a matter of months.
Daily transactions exceed 200,000. No wonder various people around the world make bitcoin investments as a hedge against the devaluation of their local currencies. August 1, 2017, witnessed a hard-fork that saw miners split over the ideals governing Bitcoin and as such, a spin-off that resulted was Bitcoin Cash. At that time, the question on many people’s mind was whether this altcoin was ideal for the market. They also speculated whether or not it would be able to compete and sustain itself through the volatile crypto environment.
Over the last three months, Bitcash has experienced market fluctuations that were largely unpredictable at best. Bitcash had a starting value of $630.67 in August and held relatively firm until the middle of September when the value fell to $366.09, and even further a month later in mid-October to $311.47. This trend continued until the beginning of November when market changes enabled an increase to $662.71. This price experienced a further spike on the weekend of November 11, 2017, when Bitcash, after the Segwit2x was called off, traded at $1,539.13. By November 22 of this year, the value has fallen to $1,282.98 but is now showing signs of leveling off and is currently averaging approximately $1,200.
However, Kirill Bensonoff, partner at Caviar, doesn’t believe this upsurge in value is sustainable. “I don’t see Bitcoin Cash appreciating much further.” He adds that he is “not a believer in forked currencies. I don’t believe these solve a fundamental challenge, and these also present a problem of supply. Any time a fork happens, supply is increased, which is not good economics.”
The rate at which the value of Bitcoin Cash is increasing in such a volatile and highly speculative marketplace is cause for concern among investors, but others, like Vincent Jacques, CEO and founder of Chaintrade are willing to bet on it.
Coming to its defense, Jacques says, “Bitcoin Cash doubled its value in 48 hours from Nov. 9 to Nov. 11 – immediately following the announcement that the Bitcoin Segwit2x fork was called off. The fundamental issue at play here is that the current Bitcoin architecture is not scalable and will be unable to handle the volume of transactions that are yet to come with cryptocurrencies. Bitcoin Cash, on the contrary, is more scalable due to its block size of 8MB vs 1MB. For this reason, I believe the rise of Bitcoin Cash will continue and it is even likely to surpass Bitcoin as the cryptocurrency of reference.”
Bitcoin Cash wants to be the king of Bitcoin and has been trying to manipulate the market over the last couple of days. This is somewhat evident in the crowdfunding initiative to raise USD200 to increase awareness of Bitcoin Cash through different media streams – an initiative that realized USD17,000 from various sources, now labeled the Bitcoin Cash Fund. Its main objective is to try to make Bitcoin Cash more mainstream, and turn it into the preferred currency.
Bitcoin Cash has a strong following in Korea and Asia, which is essentially what led to the Bitcoin hard fork. It has reached a total of $2,500 for 18 minutes over a week ago, and I believe will continue to do so, except for the fact that developers are not using Bitcoin Cash which could hinder its success.
Sergey Grybniak, Founder of Opporty concurs, as he believes “what is happening to Bitcoin Cash is pure manipulation in a pretty deep level. Based on that I think that it will not last long.”
Bitcoin Cash may be a ‘clone’ of the real deal, but in a marketplace that is diverse and has already experienced a fork, the future is speculative, at best.