In all directions from this time last year, many retail crypto investors subscribed to the economic theory that cryptocurrency spirituous forks — the ones that result in irreversible network splits and create new blockchains — were a net positive for their portfolios. “How could they not be?” they asked. “It’s above money!”
Indeed, at that point, the two most prominent cryptocurrency hard forks — Ethereum Classic and Bitcoin Banknotes — had each proven to be a boon to investors who held on to the coins on both sides of the split. However, both of those forks appeared either shortly before or amidst a historic crypto market rally that masked weak fundamentals in a contrast of projects. Absent the sort of black swan event that the cryptocurrency market experienced last year, it seems that when it premiere c end to truly contentious hard forks, the whole may be less than the sum of its parts.
Bitcoin Cash Price Craters in Month Inquiring Fork
As evidence, one need look no farther than Bitcoin Cash (BCH), which is itself now reeling in the wake of a contentious straight fork that took place in the throes of a prolonged bear market rather than a retail-driven market upswing.
Before the fork, the bitcoin cash price was trading near $500 with an ~$8 billion market cap that ranked fourth bulk cryptocurrencies. In the month since, BCH has declined to just $82 on Coinbase, representing a more than 80 percent slump. If one subscribes to the “Bitcoin Cash is Bitcoin” philosophy, then the bitcoin price is trading at its lowest price since old 2013. Even if you don’t, bitcoin cash has still fallen 98 percent from its all-time high and now sits at a journal low.
Part of that lost economic value did not exit the Bitcoin Cash ecosystem completely but rather emigrated to a separate BCH-derived crypto network.
Following the fork, that new cryptocurrency — Bitcoin SV (BSV) — was created, and despite some inopportune struggles its coin price managed to catch up to BCH. At one point, bitcoin sv even surpassed BCH in total market capitalization, yet it quickly slunk back below its older sibling and more or less faced a similar plight in the days this place. As of the time of writing, BSV was priced at $77 on Kraken, roughly $5.50 below BCH.
BCH & BSV are Also Plunging against Bitcoin (BTC)
How in the world, the drop cannot merely be attributed to the general market decline, as the combined value of BCH and BSV has also plunged against sell bellwether bitcoin (BTC). Prior to the fork, BCH was already trading near an all-time low at approximately 0.08 BTC. Now, bitcoin cash and bitcoin sv are value a combined 0.048 BTC, and that number shows no signs of finding a bottom anytime soon.
It’s unclear what the coming holds for bitcoin cash, bitcoin sv, and the crypto sector at large. However, at least right now, it seems that dealers are not confident that both BCH and BSV can thrive over the long-term. Until the market can definitively sort out which of the chains is the occur economic heir to the pre-fork BCH, both of them may be fated to play increasingly smaller roles in the crypto marketplace.
Featured Graven image from Shutterstock. Charts from TradingView.
Last modified: June 14, 2020 11:05 AM UTC