Bitcoin Cash Explodes To Record Highs Over $900 - Here's Why

Tyler Durden's picture

After meandering around $300 for the last two weeks, Bitcoin Cash has rocketed higher in the last few days - now trading at record highs over $900. As Bitcoin Cash has surged, Bitcoin has been falling (now back below $4000) as Bitcoin Cash mining profitability becomes more appealing to miners.

Bitcoin Cash has surged to a new record high in the last few days, now triple the market cap of Ripple and over half the market cap of Ethereum...

 

And Bitcoin has been sliding...

 

So just what is going on with BCH? Coinivore explains... As blocks continue to process, BCH edges its way closer to the legacy Bitcoin’s network mining profitability.

 It’s what could be known as the “flippening,” and block 479808 is the block to watch if it’s going to happen (this weekend), Coindesk reported.

 

Block 479,808 (set for this weekend) will likely trigger a difficulty adjustment downwards 50%, and if the prices of bitcoin and bitcoin cash stay the same, this means miners will make almost double on bitcoin cash what they would on bitcoin.

 

As BCH mining profitability becomes more appealing to miners, the chance of other mining pools using hash power for BCH is greater, especially if the new kid on block Bitcoin Cash’s markets continue to rise.

 

Now, why would miners abandon the legacy Bitcoin? Because BCH chain’s difficulty has also dropped, and at the same time the price has risen over 75% in the last two days. As such, Bitcoin cash mining (BCH) is now currently 2% percent more profitable to mine than the legacy Bitcoin (BTC).

 

Another reason is the legacy Bitcoin blockchain charges higher fees on transactions, so miners must take into account the extra 1.5 BTC per block on Bitcoin (about $6,000 USD) while Bitcoin Cash offers very low fees under $50 USD.

All around BCH just seems like the more attractive opportunity for miners.

Additionally, Coindesk notes that new exchange volume is also helping drive BCH higher...

While both bitcoin and bitcoin cash share a transaction history, there's at least one major differential that changes their markets – bitcoin cash didn't inherent bitcoin's expansive global exchange network.

 

This means while bitcoin is widely available for trading across continents, only a few major players stepped up early to add Bitcoin Cash.

 

Still, signs suggest more exchanges could soon see a value in doing so. Case in point, the trade volume in bitcoin cash observed during the recent run was largely denominated in the South Korean won today.

 

Yesterday, about $1.2 billion of the $2 billion in total bitcoin cash trade volume, or around 56%, appeared to be transacted in won on just three South Korean exchanges  – Bithumb, Coinone and Korbit – according to data from CoinMarketCap.

 

Such a strong regional showing could indicate pent up demand – but whether it's from sellers seeking to sell, or buyers looking to buy, that remains unclear.

 

Prior to the increase, though, bitcoin cash trading volume was relatively light earlier this week, and it increased roughly tenfold today.

Finally, we note that Faster processing times may be appealing, as CNBC reports that Bitcoin Cash faster processing is what likely caused 40 percent of investors increasing their bet on it.

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bwh1214's picture

This video is in response to Chris Duane's challenge to the crypto community. It includes a wager that the Silver Shield has not and likely will not accept, so much for having courage of ones conviction.

http://www.themonetaryreset.com/2017/08/duane-challenge-accepted-and-wag...

Looney's picture

 

BitGlitter vs. BitFairyDust   ;-)

Looney

FreeShitter's picture

Looneylost out vs butthurt looney ;)

 

 

SILVERGEDDON's picture

Big pump and tail ramp just to reel in the last of the rubes with cash to burn before they get sent to the investor lemming cliff of suicide. 

chuckymcgee's picture

Bet you've been saying that since Bitcoin was what, $1 a coin?

FreeShitter's picture

Been hearing all of that since it came out dude, you are gonna have to come up with a new meme. I could rag the shit out of silver but I stack it too. I hold no emotional attachments to any investment.

Mango327's picture

Seriously. I know another name for somebody who makes emotional investment decisions: a loser.

Notveryamused's picture

Additional miners/hash-rate moving over is temporary. BCH is simply not very popular among users. So while BTC may experience a 'fear drop', the BCH price will not be the beneficiary. No-one is rushing to use a less tested, less industry supported BTC version with higher fees to boot.

markovchainey's picture

"I hold no emotional attachments to any investment." 

That right there FreeShitter.

At this point I do wish I'd got into Bitcoin when I first heard of it, but it also makes me wonder when I would have cashed out.  If I'd bought at $15 would I have cashed out at $100?  $200?  $500?  Still be holding it?  I have no idea.  The same question arises regarding all investments.

To the people who have realized gains on Bitcoin, Ethereum, gold, silver, stocks, one-armed-Lebanese-whores, I can only applaud you.  Good job!  I like when ZH lurkers win, even the ones I disagree with.

FNORD

ExplodingEntropy's picture

Its still super cheap. The value of bitcoin in usd is a counter where each point  represents another step towards the death of the dollar.

But the points dont matter and its all made up anyway

Stan Smith's picture

     I bought some early and have simply held.    Im not a crypto "guy" either,  I just viewed it as another thing to throw in the portfolio. 

     As for the idea that governments will close in on it -- I'd agree,  but to what extent?  In my opinion markets work because most governments telegraph anything and everything.   Even when they arent bright enough to know it.    Or worse, are in on it.   We've seen that shit show before.   Me thinks we're seeing it again, we just don't know it yet.   Well, at least most of the folks havent.

    I hold no disillusion about it.    But im not dismissing it.    I'll make out off it regardless when I sell.

quadraspleen's picture

“I hold no emotional attachments to any investment.”

^^ this.

Glad I held my BCH instead of dumping them the minute my Trezor wallet showed them...wondering if I should flippen my BTC to BCH too...

FreeShitter's picture

Im holding onto mine for awhile, I was going to sell but decided not to.

VD's picture

Tulipcoin vs Tulipbulbcoin

 

dot com v2.0

Planet Israel's picture

I would never have become a day trader in the tech bubble and I won't become a crypto-trader now.  What about that new bitcoin fork coming up?  is it segwit, 1m, 2m, or 8m?  You people seem to jump crypto's like a drunken sailor at a shanghai whore house.  What you don't realize, just like the sailor who thinks he only sleeps with good clean whores, is that long after you sell out of crypto the IRS may still consider you a target of interest.  How about 50% of maximum balance?

Crypto's.  The gift that keeps on giving.

chuckymcgee's picture

Sell enough of any asset, whether it's gold, silver, stocks, whatever through reputable channels and the IRS will consider you a target of interest. Surprise though- it may be a lot easier to be sneakier with an asset you can literally sneak through customs with a string of characters on a piece of paper than some ultra-bulky physical good or something held by a bank.

Planet Israel's picture

Its a PUBLIC ledger.  And the more public/private key pairs they decrypt the easier it is to decrypt the next.  This concept closely parallels the "the more exchanges you make compliant the easier it is to force the next", which is also closely related to "the more countries you force to bring into the one-bank system the easier it is to force the next".

If the one-bank decides to deal with crypto's with strategy X then only a few outcast states will fail to comply.  Check out what happened with FATCA.

gunzeon's picture

bounce it in and out of a few altcoins at an exchange and they're thrown clean off the scent. Impossible to track ... unless it was OBL or someone really important and they could justify thousands of manhours

gunzeon's picture

or, should i sy ... someone like Donald Trump alleged to have been cohorting with Russkies lol !!!

... then they'd put the hours in for sure ... and come up with something ...

The IRS however would need to stand their case up in a court and this is where it'd fall down

Planet Israel's picture

"The IRS however would need to stand their case up in a court"

Its called a john doe summons, and when the IRS talks about revenue, Congress listens.

One box on your 2017 1040 is all it takes:

"Did you own any crypto currencies in fiscal year 2017?  If so, attach for IRS-666-ASS-RAPE"

FreeShitter's picture

paying taxes is illegal because it's funding terrorism

Raffie's picture

They still trying to find that ETH trader who made over $200mil.... sure ONE day they might figure it out, or not.... who knows or cares. 

Hope all these stackers are paying capital gains on their stacks. Oh ya, PM has yet to spring up to have taxes imposed on it. 

But I digress, what we talking about?

OH YES, all natural organic, free range Pepsi.

Planet Israel's picture

You have no fucking clue what it means to have the power of the IRS hanging over you and your families fate. There are about 9m US expats, a couple of million of them are also Canadians.  Many of these Canadians were born in the US for various reasons, but have spent their entire lives in Canada.  The IRS has decided to claim that all these accidental americans by birth now owe capital gains and income taxes and bank account penalties on their entire existance.  Its part of FATCA, you ought to grow up and read about it before you dismiss things you have no clue about so cavalierly.

bcking's picture

You don't undestand how to buy and sell anonymously?

Planet Israel's picture

No, I understand what it means to swear to the IRS that this tax form is complete.  Of course you realize that there is no statute of limitations for fraud, and that penalties for wilful tax evasion are draconian.

Of course you also realize that the tax compliance industrial complex is ready and willing to extract every santoshi of your gains in order to get the IRS off of your back.  That means removing leins on your pay check and unblocking your passport.  In the near future they will extend their control grid to every aspect of your existence.

Raffie's picture

So much BUTT HURT FOR SURE...

Best call him the wambulance.

Schmuck Raker's picture

Intern Tyler gone wild.

 

The Cooler King's picture

Looks like it's sliding (over the weekend) to me.

 

But who am I to spoil anybody's party?

FreeShitter's picture

BTC is close to 4100 again....its a miner's war between BTC and BCH. If you held BTC before Aug 1st you got a free coin from the fork called BCH (835.00) at the moment. 

MANvsMACHINE's picture

Heading toward some sort of equilibrium. Where is that for each coin?

Stay tuned for the next episode of "The Bitcoin Wars." It's not a race war, it's just a race that I called a war!

bloostar's picture

If you ask me it's more like Pokemon. Gotta catch em all but you'll never understand wtf is going on! I like gold.. I can see it, count it and eat it. This bitchcoin just seems too complicated as money.

quadraspleen's picture

They will equalise in price before Christmas

MANvsMACHINE's picture

Question then is, "at what price?"

fattail's picture

"If you held BTC before Aug 1st you got a free coin from the fork called BCH (835.00) at the moment. "

A free coin.....

Let that sit in and simmer....

Where do free coins come from?  Forks???    Where do Forks come from?  A split in a governing body?  

Can all of these cryptos fork and provide free coins to their owners?

I want to believe in cryptocurrencies, I really do.  This seems like they are just changing the rules to enrich the early adopters, but there remains such a demand for any method for evading capital controls the price does not respond to the increase in supply.  

It appears to be the greater fool keeps hitting the bid, because they have to get their currencies converted out of Yuan before the devaluation.


Mango327's picture

How about all the paper claims to physical gold? Is any asset even marginally connected to the fiat paper system legitimate in any way? Legitimacy is a metaphysical concept, not a scientific one, it is subject entirely to people's belief and trust that things will happen a certain way because of the given actors or incentive structures. I don't consider usury to be 'legitimate' work, but that hasn't stopped several generations' wealth being built on top of it. Where it goes from here is an open question, and anybody who thinks cryptocurrencies aren't a part of that future is fooling themselves. I still don't understand how a microchip works, but here it is, day after fucking day, doing its thing pretty well. Long live the Blockchain! Hai, Nakamoto-san!

The Cooler King's picture

It only takes $5 on your coal fired electricity bill to dig it out of the ground.

 

Which naturally means that Al Gore is a gig fan.

Belerophon's picture

When you look at how tiny Bitcoin and other cryptocurrencies are compared to the mainstream financial system, it only takes a very small percentage of new people coming in to drive the price up.  This is also true of gold.

The cryptocurrency phenomenon is a reaction to government regulation of money, forcing fiat down our throats, etc.  Yes, gold is better.  But the government killed e-gold. So, cryptocurrency is the reaction to that.

Golden Phoenix's picture

Only a fool doesn't ride a 51,000%+ increase. Rationalize your FOMO any way you want.

Yellow_Snow's picture

There was a risk holding Bitcoin Cash... a lot of people sold it for $200 and change, it could have gone to 0.  And the price of Bitcoin dropped down to about $1700 prior to the fork.  So there were risks all around.  There was so much more here than just another free coin...  It might have seemed to look that way for someone hearing about it in the news.  But it was a 'trying moment' for serious Bitcoin investors.

Advoc8tr's picture

Indeed ... and we have another one on the horizon.  It is not good for the brand.  Let us hope that the BCH surge is a counter attack in the form of TEMPORARY hash power to increase difficulty before all jumping back to BTC and leaving the BCH miners empty handed for a while.

I think core should stick to the NY agreement.  We derided the BCH crowd for jeopardising Bitcoin and Crypto confidence with their ill timed challenge and now Core seem to be doing the same thing and justifying the accusation that if BCH'ers agreed to Segwit then BTC core could just renig on the block-size increase. 

Yellow_Snow's picture

Newer versions of mining software can switch between coins based on the profitability.  Once that gets added on future updates, we could see big swings between these 2 coins.  Should be interesting...

tropicthunder's picture

Just keep in mind that a single 96% mining pool controls all of the BCH hash power, likely ANTPool/China. The security ramifications runs deep in BCH whereas that problem just doesn't exist with BTC. The single largest mining pool (also ANTPool) is 19% for BTC. I would not be loading up on massive amounts of BCH unless the mining pool allocation becomes way more transparent.

SILVERGEDDON's picture

Satoshi is prolly waiting for the NSA to have him flush the pool. 

IRS wants their back taxes, coin heads.  

MadHatt's picture

Taxes are required if you convert it to fiat money... but, there is no reason to do that.

rbianco3's picture

Nope- govt. says it's an equity but it is not and there is no legal precedence.

And you can buy Gold with BTC at JMB and probably other places soon.

Will there be a government to file taxes with in a decade? Government is over.

quadraspleen's picture

“you can buy Gold with BTC at JMB and probably other places soon.”

www.bitgild.com

A coin is worth about 3.3 Troy oz (in GBP) about now. Fill your boots

makinbacon's picture

It's like a school of piranha...once the meat is gone ...they swim away.

Blockchain is beautiful though ...even if a bunch of dickheads turned it into a casino.


Hyjinx's picture

If more miners move to BCH doesn't that mean a supply drop in BTC?  Therefore BTC becoming more valuable in the mid to long-term?