Bitcoin Cash Is Not Free Money
Ever since the Bitcoin Cash hard fork was announced, many people have viewed its token as “free money.” While it is true these new tokens will be issued to users at no additional cost, they are most certainly not free money. In fact, many people feel Bitcoin Cash will take away some of Bitcoin’s value, just as Ethereum Classic did to Ethereum. Although the value of BCH has yet to be officially determined, it is not free money in the way most envision it.
The fact that every holder of Bitcoin is entitled to his or her share of Bitcoin Cash tokens does not make it free money. BCH tokens will be issued at a 1:1 rate to Bitcoin. If you own 100 Bitcoin, you will receive 100 Bitcoin Cash. Those new tokens can then be sold on supporting exchanges, either against Bitcoin or fiat currencies. However, the value of these tokens may be effectively subtracted from the Bitcoin price at that time.
Let’s put this into numbers for a minute. One Bitcoin Cash is currently valued at around US$400. These tokens do not exist currently, and IOU values always betray actual prices until the tokens are available in an official capacity. However, assuming they retain their US$400 value when the tokens are live, that means that value may be deducted from the Bitcoin price at that moment.
If one Bitcoin is worth US$2,800 by the time the split happens, and BCH is worth US$400, it is not unlikely Bitcoin would drop to US$2,400 on that day. The value for BCC has to come from somewhere, and deducting it from the regular Bitcoin price would seem the most logical course of action. With two competing forks, the value of the Bitcoin network — the market cap, in this case — will be distributed over the two blockchains. The actual values of both currencies will fluctuate heavily over the first few days following August 1st.
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Source: https://themerkle.com
Prepared by @SydesJokes
I get that, but even if the price of BTC drops by the same amount that BCH is, if you expect the price of BTC to go back up to where it is now or even surpass it then it's definitely a win. Especially if you take that BCH and immediately exchange it for another coin or even for BTC. The price of BTC might take a hit initially but I fully expect it to bounce back. I just wish I had some BTC to take advantage of the opportunity.
i don't think anyone have 100 bitcoin :D
There is going to be a lot of volatility, especially with the BCC price. I think it's going to tank for a while, and it may also hurt the BTC price in doing so. I also expect a lot of people who have gotten out of altcoins and back into BTC for the free BCC to go back to altcoins. This would also mean a lower BTC price as capital flows out of Bitcoin and back into altcoins.
very nice analysis
Good stuff!!! and interesting as well. Massive opinion is that token just will be a simple altcoin else. But we can see surprises on the way!!!
That makes sense. BCC well explained thanks
Good stuff @sydesjokes - Resteemed
I agree 100% with you. Just don't know why some people think they are going to win free moneyººº
Sooooo, if for example you end up with some BTC and an equal amount of BCC. Then when the dust settles you sell of your BCC for ... anything, LTC, DSH, etc. Who's gonna wanna buy it from you? Wouldn't it be worthless on the spot if you can't sell it?
In which case regular BTC will go on it's merry way with no more than a bruise.
Excelent post sydesjokes checking the Bitcoin Cash market this days!