By
Steve Muchoki
April 18th, 2024
With the cancellation of SegWit2x hard fork, there is a shift in attention towards Bitcoin’s first derivative ‘Bitcoin Cash’. How far it will hold the momentum remains to be seen.
Post the cancellation of the SegWit2x hardfork, one of the cryptocurrencies which seems to have benefited the most from this decision is Bitcoin’s own first derivative ‘Bitcoin Cash’. In the past week, investors are seen to be shifting hands from Bitcoin (BTC) to Bitcoin Cash (BCH).
While Bitcoin has corrected by nearly 30% from its all-time high, Bitcoin Cash, on the other hand, is gaining significant momentum and recently touched its all-time high of $2477 by crossing $41 billion in valuations and toppling down Ethereum to be the second most valued cryptocurrency after Bitcoin.
The unprecedented uptrend in Bitcoin Cash prices is majorly supported by huge volumes coming from South Korea as miners who supported the SegWit2x are said to shift their focus towards Bitcoin Cash. However, this is a general trend – miners always tend to focus more on profitable blockchain as they make better returns for mining their blocks.
On the other hand, businesses and individuals who supported the SegWit2x say that the surge in Bitcoin Cash prices will be short-lived. Xapo President Ted Rogers said that this growth of Bitcoin cash is completely inorganic and unsustainable for the long term.
He believes that the 100% shoot-up in the prices just within one day is suspicious more specifically as the trading volumes supporting the upmove are concentrated only by South Korea. Rogers said:
“This Bitcoin Cash price move is far too fast to be real or sustainable. If it was built on fundamentals, earned over period of time, ok. But there is no weight yet behind Bitcoin Cash: virtually no users or businesses, nothing outside of hash power & pumped price. Bitcoin Cash will correct very painfully soon.”
Other notable personalities like Jack Liao, CEO of Hong Kong-based mining firm LightningASIC, who has been a noted critic of the mining operations, called the recent surge in Bitcoin Cash a “total bullshit.” He further stated that “Many, many investors just see the change in hash rate, but they cannot support such a big bitcoin cash price.”
There is a lot of confusion looming over the recent uptrend in Bitcoin Cash and, as it is currently more profitable to mine over Bitcoin, it is certainly going to grab more attention from miners. Once the difficulty adjustment takes place, analysts believe that the miner community will again switch-back to a fundamentally more stronger Bitcoin.
One obvious fact is that both Bitcoin and Bitcoin Cash has contrasting visions. While Bitcoin aims to be considered as a robust store of value, Bitcoin Cash aims to provide a flexible settlement and emerge as a digital cash system. Because of these two contrasting philosophies, bitcoin and security expert Andreas Antonopoulos believes that they can co-exist together and can serve their own supporters in a way. Many other cryptocurrencies like Ethereum, Litecoin etc sustain because of their contrasting and different philosophies that appeal to their dedicated supporters.
The only thing about Bitcoin Cash is that it doesn’t enjoy a global investor support like Bitcoin. Very few people have expressed their support for Bitcoin Cash and don’t believe it is able provide a long-term value and sustainability like Bitcoins. One of the largest exchanges – Coinbase – still doesn’t support trading in Bitcoin Cash. With such a concentrated support from one particular part of the globe, there are slimmer chances for Bitcoin Cash will sustain the move for long term and new investors need to cautiously decide in this aspect.
Meanwhile, at press time Bitcoin Cash is trading at $1365.61, according to the CoinMarketCap, and it remains to be seen how long it can sustain the rally.