Why Bitcoin Cash (BCH) is crashing?

What is Bitcoin Cash?

Bitcoin Cash is the result of Tuesday’s Bitcoin fork: a group of miners ‘forked’ from the main bitcoin blockchain by switching to a new version of software with greater transaction capacity. Therefore BCH is a new version of Bitcoin on a new blockchain with different rules.

Price

Bitcoin cash closed at $452.66 on Wednesday (the day after the split) after reaching a high of $756.93 and a low of $309.33. Now the price is around $280 but it will probably go down even more in the next days.

As expected, now that Bitfinex and several smaller exchanges have opened Bitcoin Cash deposits, the price of Bitcoin Cash has dropped precipitously. At press time, the price of Bitcoin Cash has dropped by 40 percent in the last 24 hours, with even greater decreases likely.

In addition to opening up Bitcoin Cash deposits and withdrawals, Bitfinex also enabled margin trading on the currency. This enables traders to short sell the asset, which is likely to further lower its price. Besides, many experts said there would likely be some short-term trading activity, but have expressed doubt over the longer-term potential of "bitcoin cash".

"Over the longer term, Bcash's prospects are limited due to the relatively small size of the community maintaining its blockchain, developing its software and using the cryptocurrency," Aurelien Menant, founder and CEO of cryptocurrency exchange Gatecoin, told CNBC by email.

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Source: CryptoBlog.tech