Bitcoin Cash Soars 70% Overnight Amid Bitcoin Uncertainty & China Crackdown

Bitcoin Cash soared overnight, spiking as high as $569 (from below $300) as renewed uncertainty around Bitcoin re-forking, reports that the first 8mb block has been mined, and fears over further crackdowns in China on Bitcoin trading sparked demand for the forked currency, pushing it back up to the 3rd biggest cryptocurrency by market cap.

As CoinTelegraph reports, Bitcoin Cash has jumped 75 percent in value in 24 hours after the fork mined its first 8mb block. Reacting to additional uncertainty surrounding a further Bitcoin split and a suggestion Bitcoin Core may fork, prices have spiked to as high as $569 this morning...

Even more encouraging news for the fork’s loyal supporters came in the increasingly profitable option of mining BCH versus traditional BTC.

Pushing the 'new' virtual currency back to 3rd place by market cap...


The uncertainty stems from concerns that Bitcoin will create a 3rd virtual currency (via Axios)

Just a few weeks after bitcoin announced that it was splitting into two separate entities, the initial version of bitcoin and its new "bitcoin cash," the network is adding a third version, per Motherboard.

  • Bitcoin first split in two as a result of the initial network's failure to keep up with the market's rapid transaction growth.
  • With the introduction of bitcoin cash (#2), the currency could offer a transaction capacity eight times the size of the original bitcoin, which developers hoped would ease some of the currency's current back-log issues (and so far bitcoin cash has done just that).
  • But now, a different group of bitcoin developers are urging for a third option, one that will combine the best of the two currencies; essentially a new bitcoin blockchain with its own set of rules.

Potential problems: Three separate currencies could spur a debate over which currency is understood as the "true bitcoin." And juggling three cryptocurrencies could also lead to one dying out.

The idea for the new version dates back to May, when Bitmain, the largest bitcoin infrastructure company in the world, and bitcoin developer Jeff Garzik, got together and signed the "New York Agreement," under which they agreed to adhere to a certain block size increase (two megabytes) alongside segregated witnesses. They call it the Segwit2x, and it's expected to be launched at some point in November.

A breakdown of the three cryptocurrencies, as featured in Motherboard:

  • One megabyte blocks
  • Segregated witnesses
Bitcoin Cash
  • Eight megabyte blocks
  • No segregated witnesses
Segwit2x/New York Agreement
  • Two megabyte blocks
  • Segregated witnesses

Bitcoin is steady for now, not far off record highs...


Perhaps more worrying for the bitcoin community is news that China is calling for a further crackdown on Bitcoin trading. As The South China Morning Post reports, China’s official Xinhua News Agency has called for the rein in of risks from bitcoin trading even though trading volume of the virtual currency in Chinese yuan has dropped from 95 per cent to 15 per cent this year in the global market, an indication that Chinese authorities’ regulatory efforts are paying off.

“The trading volume and turnover on major bitcoin trading platforms in Beijing have plunged more than 99 per cent compared to the end of 2016,” Xinhua, the mouthpiece of the Chinese communist party said in an article. “The trading volume of bitcoin in Chinese yuan has also dropped from 95 per cent to 15 per cent in the global market, showing the shift in cryptocurrency trading being initiated by Chinese buyers to international buyers.”

The news article indicated that further regulatory measures may be put in place, ahead of the key 19th party congress in the autumn.

“It is a usual move for the Chinese government to voice their opinions through state media first, before the conduct any measures on various issues,” said Professor Chong Tai-Leung from the department of economics at the Chinese University of Hong Kong.

Of course, Japan and South Korea remain the most active players in Bitcoin in Asia for now, but China has over one million bitcoin investors, with the total investments of several billions of yuan, according to data gathered from the country’s major Bitcoin trading platforms, Xinhua said.