Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue
A new version of bitcoin hit the market on Tuesday and, on its second day of trading, it has already tripled in price and its market cap is now third biggest of all digital currencies.
Known as Bitcoin Cash, the new currency arrived via a so-called “fork” in which a faction of people who run the software that controls bitcoin started a breakaway version.
The price of Bitcoin Cash hovered between $200 and $300 for most of Tuesday and then suddenly shot up. Bitcoin Cash has also appreciated in relation to bitcoin—one unit of the new currency is now worth about 30% of the original one.
Meanwhile, the price of the original bitcoin has, contrary to the fears of many bitcoin owners prior to the split, maintained its value. On Wednesday, bitcoin was trading around $2,700, which is not far from its all-time high of $3000.
As for Bitcoin Cash, it can be seen as a new asset class that achieved a valuation of $12 billion literally overnight (Update: as of mid-afternoon, the price had fallen to closer to $450 for a market cap closer to $8 billion.)
It’s unclear if Bitcoin Cash will be able maintain its value since, like other digital currencies, its real world use is limited and its value derives primarily from what investors assign to it.
And part of Bitcoin Cash’s surge in value may be tied to a liquidity issue arising from a decision by some exchanges to refuse to distribute the new currency to their customers.