What was at the origin of the Bitcoin Cash rally?
It was a hectic weekend for the crypto trader. As Bitcoin recedes below $ 5,500, traders suddenly switched to the bitcoin branch, Bitcoin Cash (BCH).
The third most popular cryptocurrency after Bitcoin and Ethereum, Bitcoin Cash, was created from a hard fork of Bitcoin in August. Last Sunday, Bitcoin Cash soared from $ 600 to $ 2,790, raising its total market capitalization to around $ 22 billion, at least for a short period of time. On Monday, BCH fell back to $ 1120 before recovering. It is currently trading at $ 1,305 at the time of writing.
What is at the origin of this sudden and unexpected peak? Daniel Masters, director at Global Advisers Bitcoin Investment Fund, accused Korean traders of "market manipulation" via the Bithumb stock exchange and appealed to his LinkedIn relations to complain to the Korean financial supervisory authority:
Bithumb servers collapsed during the surge; Seoul-based exchange users could not make withdrawals or make deposits after a swelling of the transaction volume that caused the server to crash. Reports indicate that the volume of transactions was about 800% higher than in October.
The main driver of the initial Bitcoin rollback was the suspension of the software update called "SegWit2x". Although some believe that the planned fork was an upgrade, the main developers did not finally support it.
When news of the cancellation broke, Bitcoin's downturn began. Some speculate that the consolidation was triggered by investors fleeing Bticoin when they realized that there was more hard fork that would provide free dividends.
It hit its all-time low of $ 5,426.00 on Sunday, its lowest since October 25, down nearly 32% from its peak of $ 7,888 on Wednesday.
Of course, Bitcoin is known for trading volatility and it tends to rebound quickly. It seems however that Bitcoin Cash is in competition with its motto "mother" in the stakes of volatility.
Trace Schmeltz, a partner at the Barnes & Thornburg LLP offices in Chicago and Washington, DC, a cryptocurrency observer, notes that it is not surprising that Bitcoin Cash is making rapid progress:
"For cryptocurrency to reach its full potential, it must be transactional. Most investors were waiting to see if Bitcoin itself would gain the flexibility promised by Bitcoin Cash. When Segwit2x was taped, it became clear that anyone expecting more features, scalable blocks and potentially faster transaction verification should turn to Bitcoin Cash. "
Sergey Grybniak, founder and CEO of opportuny.com, a service market on the Ethereum blockchain, thinks the fundamental problem is that Bitcoin's current architecture is not scalable and will therefore be unable to handle the volume of transactions at come with crypto-currencies. He notes that Bitcoin Cash meets this need:
"Bitcoin Cash, on the other hand, is more scalable because of its block size of 8 MB versus 1 MB. For this reason, I believe that the rise of Bitcoin Cash will continue and it is even likely that Bitcoin will overtake Bitcoin as reference cryptocurrency. "
Jeffrey Van de Leemput, an investor in Bitcoin, also co-founder of BTC-Finance and sales representative at Sendcloud, a Dutch-based company, says Bitcoin Cash is not just about getting attention. He is convinced that investors will be in a continuous mad race.
"Currently, there is a war between Bitcoin supporters and Bitcoin Cash supporters, and instead of supporting the development of the two coins, people are fighting to make sure their coins become Bitcoin. For example, Roger Ver has acquired the domain '' bitcoin.com '' and on this domain is promoting Bitcoin Cash as the real Bitcoin. "
According to Leemput, the reason many people support Bitcoin over Bitcoin Cash is not related to technology:
"There are a small number of people who have been successful in acquiring a lot of Bitcoin Cash at a time by mining over the period following the creation of Bitcoin Cash, and by purchasing a large amount of Bitcoin Cash. In the first few weeks, 90% of the blocks were exploited by three entities. This has indeed brought a small group of people to own a significant amount of bitcoin money as coins, as well as the mining energy that keeps the network. "
Graeme Moore, a cadre of Polymath, a platform of tokens, thinks that Bitcoin Cash is currently in a massive upward trend, which seems to be mainly related to the failed Segwit2x fork initially scheduled for this month. He concludes:
"The money is coming out of the BTC and the BCH right now, there are long delays for Bitcoin transactions, the fees for BTC transactions are rising rapidly, and BCH is a viable alternative. "
It seems that the battle between Bitcoin cryptos is raging, as BTC and BCH find their places, and their fans, in the cryptosphere. One thing is certain though, volatility will likely continue. Caution, as with any other investment vehicle, remains the best defense of the investor.
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This was the biggest artificial pump in crypto history. Roger Ver probably had something to do with it, considering he moved 45k bitcoins into an exchange before the pump. Also 30 million tethers were printed before the pump.
Unfortunately some big whales had A LOT to do with this pump and dump. These price actions were clearly done by market manipulation.
Of course it was a market manipulation. 700M$ of bitcoin transaction was waiting...meanwhile the hashrate of bitcoin cash get higher than bicoin.
"Currently, there is a war between Bitcoin supporters and Bitcoin Cash supporters" - there is no war, BCH hardly has any supporters compared to bitcoin community. That was just a planned attack by bunch of whales who paid for the attack and bought the news.