Bitcoin Cash (BCC), the latest new cryptocurrency craze, a cousin of Bitcoin, was born on 1st August 2017. The coin reached its peak of above $700 and now is trading at nearly $200. On the other hand, Bitcoin has reached its all time high and crossed the $3000 barrier. In this article, lets explore 3 reasons why Bitcoin Cash crashed.
The Beginning of Bitcoin Cash
After a few years of battle in the Bitcoin community, the Bitcoin cryptocurrency split in two, due to lack of concurrence on the rules that should guide bitcoin’s network over scalability concerns. The Bitcoin Cash (BCC) was created by a minority of Bitcoin developers. The developer were not pleased with the SegWit proposal to increase Bitcoin’s block size. The intent behind SegWit was that it would increase the block size. With an increased block size, Bitcoin is proposed to easily support larger transaction volumes.
The team behind Bitcoin Cash chose to go in for a Bitcoin fork with different rules for increasing block size. Thus was born Bitcoin Cash (BCC).
3 Reasons Why Bitcoin Cash is crashing
Lets outline the 3 reasons behind the Bitcoin Cash crash.
- Lack of Support
A majority of the Bitcoin community, including some big-name supporters do not like Bitcoin Cash.
Many exchanges did not wish to support the cryptocurrency. While the number of exchanges are slowly increasing, the larger exchanges have still not opened their doors. Exchanges such as Coinbase and BitMEX will not be supporting the coin immediately.
The number of wallets that will support Bitcoin Cash are also less. Ledger Nano S does support Bitcoin Cash and can be used to get the coin if you held Bitcoins in it.
- Lack of miners
There aren’t many miners supporting the new coin. In addition, very few Bitcoin mining pools provided the option for miners to mine Bitcoin Cash. With very few miners working on mining the coin, the number of cryptos generated will slow down.
- You got it for free
As all those who held Bitcoins in their own wallets (or some exchanges) received one Bitcoin Cash coin for every Bitcoin. This meant that many crypto investors received the coin for free. And as with all things that are received for free, the value is actually nothing. This is a psychological thought. Many investors would sell the coin and make a quick buck. So with increasing number of exchanges supporting Bitcoin Cash, the price is certainly plummeting. In case you have not yet claimed your Bitcoin Cash, here is how you can do it on the Ledger Nano S.
The Future of Bitcoin Cash
The price of Bitcoin Cash is expected to drop even further once those more coins enter exchanges. Some cryptocurrency experts believe that it is unlikely to survive at prices above $100 in the long term. One strategy to approach Bitcoin Cash would be to sell now at a profit, if you got it for free, and then buy the currency below $100. Then HODL it, till you make profit on it. You got to remember that it is still the fourth cryptocurrency in terms of market capitalisation. There is potential for it to grow. However, at this stage, its not looking very good.