The new cryptocurrency’s volatile performance on the markets suggested a lack of support from miners after the initial buzz around its creation died down.
Bitcoin Cash (BCH) hit a high of over $750 per token on Wednesday but then plummeted to just $310 in the space of a few hours, according to CoinMarketCap. The price was at $389.39 at 3.56pm today.
The cryptocurrency’s market cap has dropped around $6billion in value since Tuesday’s high of $1 billion. But bitcoin cash is still the third biggest cryptocurrency, just below ethereum and bitcoin.
Jordan Hiscott, chief trader at Ayondo Market, said that bitcoin cash may fail to gain traction after splitting off from the main bitcoin blockchain.
“Due to a lack of support from some of the major exchanges, it looks at this stage as though Bitcoin cash will fail to gain traction,” he said on Tuesday. “This may change going forward, but what is more pressing is the effect on the incumbent Bitcoin product, which at the moment is fairly muted, if slightly negative.”
Several cryptocurrency exchanges have so far rejected BCH, while others are biding their time before they start trading the new token.
For example, Coinable CEO and co-founder Brian Armstrong said: “Coinbase is certainly not opposed to adding new assets to the platform.
“We are agnostic in which assets people want to trade. That being said, we also don’t want to rush anything about. Bitcoin and ethereum exchange Coingate is also taking an apprehensive approach to the new token, saying it would “wait to determine the security of the new coin” before making a decision.
Even Kraken, which embraced BCH before the fork took place, decided to rein in its initial enthusiasm towards the cryptocurrency.
On Wednesday the exchange tweeted: “BCH deposits + withdraws may not be available for several days. We won’t enable funding until we think it’s safe.”
A day earlier, Kraken suggested it could take anywhere between eight to 80 hours before BCH was ready to trade. Aurelien Menant, founder and CEO of cryptocurrency exchange Gatecoin, has said Gatecoin would start supporting trade with bitcoin cash despite its long-term potential being limited.
He said: “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.”
But not all is lost for the token, and BCH could get a boost this November if miners decide against increasing the original bitcoin block size to 2 megabytes.
Menant said: “If most miners decide that for economic reasons they prefer to mine larger blocks and commit more hashing power to Bcash, then it’s likely more development work and user adoption would follow, and those conducting business with bitcoin may decide to adopt Bcash instead. Yet for this to happen Bcash would need to prove that its technology can match the security features and reliability of bitcoin’s software.”
Increasing the block size of bitcoin to 2 megabytes would increase the cryptocurrency’s transaction speeds, blowing the competition out of the water.
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Original Author: SEBASTIAN KETTLEY