Bitcoin cash, which is structured to handle more transactions faster than bitcoin and has become the fourth largest cryptocurrency in a few days after launching, is a house of cards waiting to fall, according to some observers, Business Insider reported.
The new version of bitcoin grabbed a top spot in the cryptocurrency rankings after it launched on Aug. 1, but veteran bitcoin observers claim the price is overinflated due to technical issues. Namely, most bitcoin holders can’t yet trade their bitcoin cash because only that portion held in exchanges can be traded.
While bitcoin holders have just as much bitcoin cash as “regular” bitcoin, the fact that bitcoin cash can only be traded on bitcoin exchanges excludes the 95% whose bitcoin is held in bitcoin wallets.
Aaron Lasher, chief marketing officer at Breadwallet, said bitcoin wallets are updating their infrastructure to allow bitcoin cash investors to move their coins to exchanges so they can trade them.
Lasher said he has been flooded with requests from bitcoin holders to put their new currency on an exchange.
Trezor, another wallet, released a statement that bitcoin cash is still offline in the Trezor beta wallet as the Bitcore backend (Bitcoin ABC) reindexes. Trezor noted that the deployment was complicated because of changes in Bitcoin ABC by means of Bitcoin Core.
Trezor noted there is no estimated time for deployment, and it did not rule out another bug surfacing.
Samson Mow, CEO of Pixelmatic and a video game developer, said the market is totally illiquid, meaning sellers cannot find buyers.
The reason bitcoin cash commanded the fourth highest cryptocurrency market cap three days after its launch is that a large portion of the market cannot move their coins. Once this changes, more people will sell their coins, Lasher said. When more are selling than buying, the price will fall.
Mow characterized bitcoin cash as a house of cards waiting to fall. He said it is not likely it will survive beyond $100 long term.
Also read: Bitcoin cash: lack of support for BCH deposits will limit price discovery
Sebastian Quinn-Watson, a venture partner for Blockchain Global, an Australia-based exchange, said some traders have said they will exit their BCC positions by Aug. 8. That is the date that SegWit, the software update for the original bitcoin blockchain, takes effect. He said that is the date the bell tolls for bitcoin cash.
If prices for it hold up after Aug. 8, it will likely be a currency for a long period, Quinn-Watson said.
At the same time, there could be a major bitcoin consolidation, he said.
Featured image from Shutterstock.
Last modified: March 4, 2021 4:58 PM