While Bitcoin Cash (the product of the weekend's fork) remains the third largest cryptocurrency (by market cap), it is rapidly collapsing in price as 'supply' picks up after Coinbase folds and will allow its clients to access their 'cash' coins. At the same time, Bitcoin is surging back towards $2900 on its way to record highs.
As CoinTelegraph reports, Coinbase has had to put up with the ire of its users, as well as threats of a lawsuit, in regards to the decision not to support Bitcoin Cash, and it looks as if that pressure has forced their hand.
In the lead up to the hard fork of Bitcoin on Aug. 1, which resulted in a new digital currency called Bitcoin Cash, many exchanges announced they would not be supporting the fork which was expected to be a small event.
In the end, Bitcoin Cash surged despite its low hashing power, hitting upwards of $700, and because the fork was off Bitcoin, it meant that any person holding the original currency was entitled to an equal amount of Bitcoin Cash.
However, that required exchanges to support both forks, and Coinbase was not one of them. This led to people threatening lawsuits as it was pointed out that this was a breach of property common law rules.
A change of heart
Coinbase now seems to have flip-flopped on their decision as they announced on their site that they planning to have support for Bitcoin Cash by Jan. 1, 2018
Coinbase has spent the last couple of days since the fork evaluating the activity of both the forked currency and Bitcoin itself, seeing how the Blockchain matures and if there's the appropriate level of mining activity. Liquidity can be determined through this, and that is vital.
Coinbase has said that it was being cautious in not plunging head-long into the controversial forked coin stating it was balancing the technical stability, security or compliance of Bitcoin Cash.
Coinbase has said on their site that they were never going to be able to safely support Bitcoin Cash on the day of its launch and that they were advising users to transfer their Bitcoin away from Coinbase if they wanted immediate access.
However, since they have decided to go ahead with supporting Bitcoin Cash, the exchange has made the following points clear:
Both Bitcoin and Bitcoin cash remain safely stored on Coinbase.
Customers with balances of Bitcoin at the time of the fork now have an equal quantity of Bitcoin Cash stored by Coinbase.
We operate by the general principle that our customers should benefit to the greatest extent possible from hard forks or other unexpected events.
Thus, once the support is fully in effect, customers will be able to withdraw Bitcoin Cash. However, Coinbase has also stated that it will make a decision on trading support at a later date. But in the meantime, customers Bitcoin Cash will remain safely stored on Coinbase.
And, among other things, that additional supply of BCC that was previously hidden, is weighing on prices. Bitcoin Cash has fallen from an all-time high of $974 to $262 today...
And at the same time, Bitcoin is rallying back towards record highs (as we suspect BCC sale proceeds are reinvested back into BTC)...
So far Bitcoin has been largely unaffected by the chain split. After briefly dropping from $2,900 to $2,600 shortly before the split, Bitcoin’s price has stabilized in the $2,700 range. Virtually all Bitcoin miners are still mining Bitcoin, with almost none having switched to Bitcoin Cash. However, this could conceivably change, although it’s unlikely.
The only remaining wild card is the following scenario. What if the Bitcoin Cash network stabilizes, exchanges open up Bitcoin Cash deposits, and the price somehow remains stable (or drops then quickly rebounds)? In such a situation, Bitcoin miners might see that it is more profitable to mine Bitcoin Cash, and enough miners might switch over to cause a small increase in Bitcoin block times.