Bitcoin Cash’s Roller Coaster Month Sees Market Cap Fall by 50%

Bitcoin vs. bitcoin cash

The value of bitcoin cash (BCH) fell hard on Monday, extending a month-long slump that has shaved 50% off the virtual currency’s value.

BCH/USD Price Levels

Bitcoin cash was has declined roughly 8% over the past 24 hours, reaching $1,623, according to Bitstamp. The bitcoin alternative touched a session low near $1,500 before rebounding. Transactions in BCH amounted to $689 million on Monday, which is equivalent to 63,409 units of bitcoin.

At present values, bitcoin cash is capitalized at $27.6 billion, placing it fourth among active cryptocurrencies. The BCH market was worth nearly $60 billion just one month ago.

After a failed rally, bitcoin cash remains on the bearish end of the trade table. Prices are now trading below the previous day’s support cluster near $1,800. Applying Fibonacci, BCH/USD has further scope to decline below $1,500.

Roller Coaster Month

Over the last four weeks, bitcoin cash has lost more than 50% of its value, as the market pulled back sharply from all-time highs above $4,000.

Like other digital currencies, BCH has struggled under the weight of speculation that South Korea was moving toward banning cryptocurrency trading. BCH has also been the subject of insider trading controversy after employees of Coinbase leaked information about the coin’s inclusion on GDAX. After extreme volatility, Coinbase recently reopened BCH-euro transactions on its GDAX exchange.

Coinbase has experienced significant challenges implementing bitcoin cash on its platform, although this is largely due to excessive demand for the digital asset. Shortly after launching on GDAX Dec. 20, bitcoin cash transactions were suspended due to “heavy market buy demand,” according to general manager Adam White. This resulted in insufficient liquidity.

Even with the declines, bitcoin cash has carved out a placed among the top digital currencies based on market cap. This would have seemed unlikely just six months after a rocky hard fork divided investors on the true value of bitcoin cash.

Bright Future

Even with the latest price volatility, there’s still plenty of reason to be bullish on bitcoin cash, according to CNBC’s Dan Nathan. In his view, bitcoin cash is poised to one day overtake the original bitcoin as the world’s most valuable cryptocurrency. That’s because many of the technical issues impacting bitcoin have already been resolved with BCH – especially in terms of transactions and overall efficiency.

In a segment of Fast Money earlier this month, Nathan tipped his hat in favor of BCH and Ethereum as being “cheaper and faster” than the original bitcoin.

Investors who are concerned about the future of digital currency transactions involving bitcoin will continue to be drawn to the BCH project. After all, scalability continues to be one of the biggest issues facing the blockchain industry. By increasing the block size to boost the verification process, bitcoin cash offers a tangible solution to a real problem. Its inclusion on GDAX and other more exchanges such as Bitstamp and Bitfinex has opened the door wide open to speculation as well as long-term value investing. Combined, these forces could make bitcoin cash more attractive in the future.

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.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi