Bitcoin cash, the new alternative cryptocurrency, is crashing.
Bitcoin cash has dropped 33% to $US290 a coin over the last 24 hours, according to data from Coinmarketcap.com. That’s down from its all-time high of $US727 set on Wednesday, a day after its debut.
Meanwhile, bitcoin is up 1.92% $US2,852.
To recap, on Tuesday, bitcoin split in two following a years-long battle in the community over the rules that should guide the cryptocurrency’s network.
That split resulted in the creation of a new cryptocurrency, bitcoin cash, which has the same basic underpinnings, but plays by different rules. In essence, it’s almost like bitcoin cash is a copy of bitcoin, but it’s built to process more transactions and faster.
Many folks in the crypto-community think that bitcoin cash’s price has been inflated by technology issues underpinning the coin.
A lot of bitcoin investors can’t access their coins. As a result, they can’t transfer them to exchanges where they can actively be sold.
According to Lasher, the CMO of Breadwallet, a bitcoin wallet, the price of bitcoin cash could drop even further once those coins are unleashed onto exchanges. That’s a result of simple economics. When more people look to sell a good than buy it, the price falls.
Samon Mow, chief strategy officer at Blockstream, told Business Insider the bitcoin cash house of cards will completely fall apart, as a result.
“It’s unlikely that [bitcoin cash] will survive at prices above $US100 in the long term,” he said.
“We have some of our key traders telling us that they will be getting out of their BCC positions by 8 August,” Sebastian Quinn-Watson, a venture partner for a bitcoin exchange operator based in Australia, Blockchain Global.
August 8 is the day on which SegWit, a software update for the original bitcoin blockchain, will go into effect.
“We see 8 August as the day the bell tolls for bitcoin cash,” Quinn-Watson said. “If the prices of BCC remain strong post the 8th then it is likely to be a currency for a long period.”
“Alternatively, we could see a consolidation in bitcoin and see it run well past its peak,” he concluded.
Get the latest Bitcoin price here.