Considering the recent(ish) success of Bitcoin Cash, we are seeing Bitcoin Cash sit under its prime value at the moment. This of course is a recurring trend across the markets, however Bitcoin Cash seems to have taken the brunt of it.
At the time of writing, Bitcoin Cash is valued at $748.65, down 3.20%.
Cryptovest have recently discussed a number of reasons which they believe have contributed to the recent fall of Bitcoin Cash. They raise some very interesting points that we now wish to explore. You can see the full article for yourself, here.
Firstly, mining is down. According to Cryptovest:
“For months, BCH has been mined by pools related to Bitmain, which may be a form of altruistic mining carried out despite the lower profitability. The influence of Bitmain has further eroded the credibility of BCH, which has always had its critics.”
The trading profile of Bitcoin Cash has changed, meaning that Bitcoin Cash is trading against more coins than just Bitcoin. According to Cryptovest once again:
“Until recently, the most active trades happened between BTC and BCH in a direct exchange signifying the trust in one network or the other. But this trading profile has changed, and there are fewer direct trades between the two coins slugging it out for price dominance. Certainly, BCH trades against BTC in part, but the two are not competing for the top price level. The chief reason is the switch to Tether (USDT), an intermediary token which is giving BCH a whole different process of price discovery.”
Finally, Bitcoin Cash is an altcoin, perhaps this is something that a lot of investors have started to forget.
“BCH is now fighting for transactions, and its big block solution is starting to look redundant. Transactions fluctuate, and there are some active days, but the numbers move between 50,000 and 14,000 transactions in 24 hours, competing with the levels of Litecoin (LTC). Besides, Bitcoin fees have fallen, making the network once again accessible, and Bitcoin carries three to five times as many transactions as BCH.”
It seems here that Cryptovest are suggesting that because Bitcoin is now more efficient, and runs at a lower cost, Bitcoin Cash is less attractive. It’s status as a Bitcoin Fork is diminishing, and now Bitcoin Cash is but another altcoin.