The Bitcoin Cash fork deployed successfully on August 1, initiating a blockchain split. The new coin debuted at 4th in the market cap rankings, but the bitcoin cash price climbed high enough that it supplanted Ripple as the 3rd-largest coin. The bitcoin price saw little movement after the fork, so the introduction of bitcoin cash caused the total cryptocurrency market cap to surge.
On August 1, the total value of all cryptocurrencies was about $91 billion. Following the creation of bitcoin cash coins, the crypto market cap immediately rose to $99 billion, its highest mark since the first week of July. The bitcoin cash price climbed throughout the day, lifting the total crypto market cap over the $100 billion threshold. It remains to be seen whether the market will sustain this influx of capital or whether it will gradually return to pre-fork levels.
Bitcoin cash survived its first day on the exchanges, avoiding a potentially-disastrous quick sell-off. Immediately following the fork, the bitcoin cash price did plunge from $400 to about $200, but it steadily recovered throughout the day. On August 2, the bitcoin cash price soared as high as $757, although it has since tapered off. At present, the bitcoin cash price is $678 – a 24-hour increase of 89%. Bitcoin cash currently has a market cap of more than $11 billion, placing it 3rd in the market cap rankings with a comfortable lead over Ripple.
It will take some time for the markets to sort out bitcoin cash’s true value. It is likely that many casual bitcoin holders are unfamiliar with bitcoin cash or have yet to claim their coins. Expect bitcoin cash to experience price swings far more volatile than those normally seen by upper-echelon coins.
The bitcoin price dropped about $200 leading up to the bitcoin cash fork after climbing past $2,900 in the days prior. It ebbed and flowed following the fork, but it held within the $2,700-$2,750 range. At present, the bitcoin price is $2,719, giving bitcoin a market cap of just under $45 billion.
As with the total crypto market cap, it is not immediately clear what effect bitcoin cash will have on the bitcoin price. It is possible the market had already priced-in the fork, but it is also possible there could be a gradual market cap shift from bitcoin to bitcoin cash.
The ethereum price increased about one-half of a percent on August 2 and currently sits at $221. This is a $41 gain since July 29, when it declined as low as $180. Ethereum has a market cap of $20.7 billion, which is about 46% the size of bitcoin’s.
August 2 was generally positive for the altcoin markets, as no top 10 altcoin declined more than 0.34%. Although Ripple fell to 4th in the rankings, it received a slight price bump. The litecoin price held steady at $42, while the ethereum classic, Dash, IOTA, and Monero prices all saw moderate increases.
Sixth-ranked NEM saw the best gains of the day, increasing 16% to $0.20. NEM currently has a market cap of more than $1.8 billion, placing it about $400 million behind litecoin.
Bitcoin dominance tumbled on August 2 as bitcoin cash staked its claim. Prior to the fork, bitcoin controlled about 48% of the crypto market cap, but its share fell to 43% once bitcoin cash was established. Ethereum’s share is now 20% (down from about 22%), which is still less than half of bitcoin’s. This chart from CoinMarketCap does not yet include bitcoin cash, but its share is about 10-11%.
Featured image from Shutterstock.
Last modified: March 4, 2021 4:58 PM