Overnight, Bitcoin cash became the third largest cryptocurrency by market cap. Reaching a high of near $800, traders are in disbelief at the fast value rise. Why is Bitcoin Cash’s value thus high? is this simply a bubble that's waiting to burst, or can Bitcoin cash overtake its predecessor?
Initially, once the fork first occurred Bitcoin cash was trading at a constant $250. As soon as the fork commenced and also the network split gracefully, exchanges started adding Bitcoin cash trading pairs. like any cryptocurrency, the more exchanges add it the upper the value rises. BCH was no totally different, once Kraken and Bittrex added the asset, the value spiked and doubled to $433.
The fire was already burning once Bitfinex finally integrated BCH, ultimately pouring a gallon of fuel into the pit. The explosion propelled Bitcoin Cash’s value to over $700 doubling the asset once more. As nice as all this sounds, once one thing is simply too smart to be true, it usually is.
While it's possible to trade Bitcoin cash that was credited by exchanges, it's still not possible to deposit BCH to associate degree exchange in order to sell it for Bitcoin or the other currency. as an example, even if Bittrex is leading the market with the best trading volume, the Bitcoin cash wallet is “under maintenance” and it's not possible to deposit any coins into it.
This means that despite the fact that the entire circulation of Bitcoin cash is around 16 million tokens, the effective supply is much smaller than that. Moreover, once the exchanges open up their wallets, it's inevitable that users can flood it with Bitcoin cash to sell. it'd be good to keep an eye on once exchanges, particularly Bittrex, enable Bitcoin cash deposits as that might be a pivotal point within the market.
Another necessary decision that may influence BCH’s value is how Coinbase will handle the case of whether or not to credit their users with BCC. Bittrex had no issue crediting the new coin to its users at a 1:1 rate but Coinbase is saying that may produce problems with their hot and cold storage.
Update for customers asking if Coinbase is keeping their bitcoin cash (BCC) pic.twitter.com/gamiKDTVmx
— Coinbase (@coinbase) 28 juillet 2017
Tim Wu, a legal scholar, claims that Coinbase is opening themselves up to lawsuits by not crediting users with BCC. He compared Coinbase to a broker that refused to issue a new stock to their owners.
Imagine a stock split where the broker declined to issue the new stock to its owners-- that the @coincase position right now
— Tim Wu (@superwuster) 30 juillet 2017
Some argue that Coinbase isn't to blame for crediting users with Bitcoin cash because it's simply an exchange and a wallet that's used to hold people’s funds. However, the problem here isn’t the actual fact that Coinbase refuses to credit users with the token, its the actual fact that the majority users weren’t able to even move coins off the exchange before the fork.
The problem is, if users move their coins from Coinbase currently, they might not get credited any BCC as the coins. In fact, Coinbase would primarily be credited those BCC if users withdraw funds from the platform. Coinbase has declared that they do not plan to keep or do something with the token, however that's simply unhealthy business.
If you've got million of bucks in an asset why not liquidate it? If you can’t liquidate it, then why not distribute it to its rightful owners? we'll be closely watching the Coinbase situation, follow @themerklenews on twitter for the latest updates.
Source: Themerkle.com
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