Will Bitcoin Cash Impact the Bitcoin Price? Traders Split on Possible Fork
Bitcoin traders may soon be able to bet on their preferred version of the blockchain.
As if a years-long debate over the network’s technical roadmap wasn’t dramatic enough, Tuesday could see yet another twist in bitcoin’s scaling debate. That’s when a group of miners and developers say they will go as far as to create an alternative network to prove bigger blocks are the best solution for increasing network capacity.
Called Bitcoin Cash (BCC), the effort will effectively fork bitcoin’s existing software and transaction history, and in the process, give every bitcoin user new cryptocurrency tokens on a new blockchain with different rules.
Should users own 2 BTC, this means they’ll now be able to claim 2 BCC on the Bitcoin Cash blockchain, a move that could generate millions of dollars in new value for traders.
Not without precedent, a similar event took place on ethereum last summer, when members of that community created a new cryptocurrency to protest a design decision by developers.
Yet if you were expecting that sort of uncertainty to be scaring away traders, according to Ripple gateway operator Rafael Olaio, the end result is anything but. Given the creation of the new network, Olaio and others expect traders to hold steady before claiming their new funds.
He told CoinDesk:
“People want to double their coins. Nobody is selling bitcoin.”
Overall, analysts offered a variety of opinions on what could develop in the days and months ahead, commenting on what they believe could be the immediate and long-term impact of the creation of a new, widely traded cryptocurrency bearing resemblance to bitcoin.
However, it’s important to note that not all traders believe Bitcoin Cash will meet this definition.
Arthur Hayes, founder of crypto derivatives trading platform BitMEX, for example, noted that “theoretically” the launch of Bitcoin Cash should cause bitcoin’s price to drop. Still, he questions whether this indeed will happen given that, historically, traders have not been kind to assets that have attempted to fork away from bitcoin.
“There have been many similar distributions based on bitcoin ownership that caused no such drop in price, including bitcoin clams, byteball, etc. I think the Bitcoin Cash distribution will have minimal to no impact on the bitcoin price,” he said.