Bitcoin cash is crashing

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.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.