Bitcoin Plunges After Upgrade Is Called Off, Bitcoin Cash Surges 40%
The offshoot digital currency surged more than 40 percent to its highest since Aug. 19, and was last trading near $947, according to CoinMarketCap. Bitcoin cash split off from the original version of bitcoin in August as a minority group of developers decided to implement an upgrade in an effort to increase transaction speeds for the digital currency.
An alternative bitcoin upgrade proposal, SegWit2x, which initially had more developers behind it, was called off Wednesday due to waning support.
Bitcoin hit a record high of $7,879.06 that day after the news, but quickly fell and was trading 9 percent lower on the day Friday afternoon near $6,500, according to CoinDesk. That marked its lowest since Nov. 1.
“You can see people playing back and forth between bitcoin and bitcoin cash trading depending on where they think near-term catalysts may be,” said Chris Burniske, author of “Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond.” “It’s been a battle of investors versus traders that were stockpiling bitcoin to get their ‘bitcoin2x dividend.'”
Investors at the time of a bitcoin split technically receive equal amounts of the offshoot currency. Disagreements over upgrade proposals have caused uncertainty over the future of bitcoin, but some traders had been buying bitcoin ahead of splits in order to benefit from a payout of a new digital currency and a potential relief rally in bitcoin following the split.
Creating bitcoin cash through the “mining” process was 13.6 percent more profitable than mining bitcoin, according to data on Coin Dance’s website.