Bitcoin Cash Corrects Lower After Record Surge as Coinbase Investigation Weighs
Bitcoin cash (BCH) corrected lower on Thursday after Coinbase suspended the buying and selling of the digital currency due to allegations of insider trading.
BCH/USD Price Levels
The value of bitcoin cash declined sharply on Thursday. BCH/USD touched a session low of $3,411, and later recovered near $3,470 for a daily loss of more than 7%. Even with the decline, bitcoin cash has earned nearly 60% since the start of Tuesday.
At present values, bitcoin cash is capitalized at more than $62 billion. Trade volumes over the past 24 hours surpassed $8.3 billion, with the bulk of activity taking place on South Korean trading desks. Bitthumb saw nearly 16% of the daily volume, according to CryptoMarketCap. Bittrex accounted for more than 10% of the daily turnover.
Coinbase Halts BCH Trading
Coinbase quickly halted trading of bitcoin cash on Wednesday as allegations of insider trading quickly spread The value of BCH spiked immediately after the exchange announced it was rolling out support for the recently forked cryptocurrency. A few hours after hitting GDAX, bitcoin cash spiked above $8,500. That was nearly three times higher than BCH’s price on all other exchanges.
Rumors quickly spread that Coimbase employees used insider knowledge to load up on BCH tokens prior to its launch on GDAX. Although Coinbase strongly denied any wrongdoing, evidence of bitcoin cash’s inclusion on GDAX surfaced three days ago on Reddit in a post called, “ATTN: Bitcoin Cash added to Coinbase API (EXTREMELY BULLISH)”.
Prior to the surprise launch, users were preparing for the release of bitcoin cash on or by Jan. 1, 2018 – the self-imposed deadline Coinbase issued in August. The exchange had previously decided against supporting bitcoin cash before a flood of angry users threatened to sue the exchange in a class action lawsuit.
Coinbase issued the following statement in August pertaining to its involvement in bitcoin cash:
“Over the last several days, we’ve examined all of the relevant issues and have decided to work on adding support for bitcoin cash for Coinbase customers. We made this decision based on factors such as the security of the network, customer demand, trading volumes, and regulatory considerations.
We are planning to have support for bitcoin cash by January 1, 2018, assuming no additional risks emerge during that time.”
It is not entirely clear how this issue will be resolved, or what other forces may have contributed to bitcoin cash’s controversial surge. Investors should therefore plan for more volatility in the near future as Coinbase concludes its investigation.
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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