Bitcoin (BTC) experienced some classic Wall Street drama this week with a volatile new cryptocurrency “Bitcoin Cash” emerging into the arena at the start of the week. Cryptocurrency investors are seeing quite a stirring start to the month of August indeed. What was the source of the turmoil that led to “Bitcoin Cash” taking the Street by blast?
Some backstory: Bitcoin users got mad over discrepancies embedded in the tech skeleton underpinnings that run the coin: the blockchain. Amid the tension, the blockchain found itself at a “fork,” fissuring to new digital currency territory. The cause of this sudden bitcoin clash? Digital currency enthusiasts felt transaction times were taking too long for bitcoin, and the community butted heads as to how to proceed in boosting the blockchain capacity.
Thus, “Bitcoin Cash” sprung to contentious reality, with crypto-investors getting so worked up that cash skyrocketed to $727 plus yesterday- having since fallen to roughly $425 today. Keep in mind this is a currency that has not even been out for all of three days- yet, when disquiet brews among investors, the needle will rise, and the needle can just as suddenly fall.
That is exactly the fear of cryptocurrency exchange Gatecoin founder and CEO Aurelien Menant, who emailed CNBC his apprehensive thoughts on the Bitcoin in-fighting: “Over the longer term, Bcash’s prospects are limited due to the relatively small size of the community maintaining its blockchain, developing its software and using the cryptocurrency.”
Next question: Has Bitcoin actually been forked? This is a query chief executive Ryan Taylor of cryptocurrency peer Dash raises, cheekily dismissing the ‘movement’ as “Some developers have created a new digital currency and formulated an effective means of distributing it, by giving it to everyone with an existing Bitcoin balance.”
Likewise, California digital asset exchange company Coinbase is taking sides in the tug-of-war and does not want to support the new Bitcoin Cash faction that cropped up. Coinbase CEO Brian Armstrong sent an ominous Tweet on Tuesday that he does not “want to rush anything out.”
Global Advisers director (who is in charge of the Global Advisors Bitcoin Investment Fund) Daniel Masters wagers these tussled tides will ebb, anticipating, “I think this thing will totally blow over.” It is not that Masters believes Bitcoin Cash is about to vanish into thin air as rapidly as it burst onto the scene. Masters notes, “I think Bitcoin Cash will exist.” However, can the new currency stand to compete against the original? Masters bets not, predicting, “I think it will be a low-priced coin compared to Bitcoin. In three months’ time, I would be very surprised if it’s worth more than $50.”
Perry Woodin, CEO of blockchain accounting software maker Node40 emailed his take on the matter that to the speediest victor go the cash spoils, commenting that this crypto-currency race will go to the one that can make the quickest sale.
Legendary “Bitcoin oracle” and chief executive of blockchain identity startup Civic Vinny Lingham expects that the original Bitcoin user base will just be selling Bitcoin Cash to make room for more Bitcoin, elaborating, “There’s a ton of BCH in the market, and people will be dropping it left right and center using it to flip back into alt coins or buy more Bitcoin.”
Bottom line, the buyers of “Bitcoin Cash” are not going to swerve the original Bitcoin off track- just make for a lot of interesting Street talk for the time being.