Bitcoin Cash Continues To Drop Ahead Of The Hard Fork
The past few months have been really quiet in the crypto world. Traders are used to dealing with big stories and big drama. And while there hasn’t been much drama over the past few months, that’s all about to change. Bitcoin Cash (BCH) has had a crazy 30 days of trading ahead of its scheduled hard fork on November 15.
For a while, it appeared that BCH would be trading near a high as the fork commenced. BCH had a strong rally for about a week starting on November 1. The price soared by more than 50% as it reached its high of approximately $637. But over the past week, the price has been tanking and doesn’t show any signs of recovering. Since November 7, BCH has dropped in value by more than 20%.
Why Is Bitcoin Cash Falling Ahead of the Fork?
There are two possible explanations for why Bitcoin Cash is dropping ahead of the scheduled hard fork. One reason is profit taking. Although a 50% return wouldn’t have meant much in 2017, it certainly is a lot in 2018. However, a second and potentially more troubling reason is the conflict between Bitcoin Cash SV and Bitcoin Cash ABC.
Craig Wright, an Australian computer scientist and the biggest proponent of Bitcoin Cash SV (BCHSV), appears to be at war with Roger Ver, the most famous name behind Bitcoin Cash ABC (BCHABC). Wright was in the news recently after proclaiming to be Satoshi Nakamoto, the founding father of Bitcoin (BTC).
As of this writing, BCHABC is trading at $420 while BCHSV is trading at $118. According to Coin Dance, data shows that a majority of hash power favors SV. On the other hand, there are significantly more BCHABC nodes running on the Bitcoin Cash network than there are BCHSV nodes. Although it’s interesting to look at this data, it’s quite simply impossible to determine what this means as far as which network will come out victorious. Creating a BTC node is relatively inexpensive so a user could start several of them for under $1,000. And while the hash rate is important for demonstrating PoW (proof-of-work), it’s meaningless if exchanges don’t accept the coin.
On November 12, Bitfinex announced support for the Bitcoin Cash hard fork. On the exchange’s twitter handle, they tweeted, “We are happy to provide full support for the upcoming Bitcoin Cash hard fork.” While the support is certainly helpful for traders, Bitfinex wouldn’t commit to choosing a side. Instead, the exchange said, “At the time of writing, we do not believe that there is sufficient consensus to identify a clear winner in the Bitcoin Cash hard fork.” Bitfinex expects to release an additional statement on November 16. Traders should certainly pay attention to that as it could be material.
There is an incredible amount of information to digest regarding the hard fork. As of this writing, it’s unclear which side will prevail as both certainly have their positives and negatives. Given the recent slide of Bitcoin Cash, BCH holders should certainly be paying very close attention as the hard fork nears.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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