Is Bitcoin Cash Artificially Price Boosting To Compete With Bitcoin?
Bitcoin Cash is currently the hottest cryptocurrency on the market but apparently that could be because of nefarious reasons. This Bitcoin alternative currency has boosted its price by 25 percent in recent days. The main driving reason for this rise is because Antpool, one of the largest mining groups has been “burning” a portion of the coins that it receives as transaction fees. This potentially reduces the supply of Bitcoin Cash – which raises the price. Critics say that the move is just a PR stunt.
This tension between Bitcoin Core and Bitcoin Cash has been increasing with each passing month. A lot of the conflict has been on Twitter and Facebook, but some of the biggest holders of each cryptocurrency are now making moves to influence the prices of each cryptocurrency.
Antpool announced on April 20 that will be burning 12 percent of the coins that it receives as payment for processing transactions. It does this by sending a portion of the fees to a blackhole address. Right now, Bitcoin Cash is enjoying an advantage of faster transactions speeds and lower transactions fees. Bitcoin Core is trying to catch up by implementing the Lightning Network – which is still under experimentation. If it is successful, it will close in on Bitcoin Cash’s lead in functionality.
In a statement, Lucas Nuzzi, a senior analyst at Digital Asset Research said
Now, projects like Bitcoin Cash are struggling to remain relevant, which is hard when very few users are using the network. Miners have to liquidate their holdings regularly to pay for their expenses. The move from Antpool is intended to slow down further price depreciation, by attempting to increase the perception of scarcity. Whether the move will be successful remains to be seen
Daily Bitcoin Cash transactions have doubled since August 2017 when it made its debut in the market. However, Daily Bitcoin Core transactions have seen a significant decline which has helped boost Bitcoin Cash. Bitcoin has been long plagued by disagreements between developers and miners on how to improve the network. This is what lead to the fork that created Bitcoin Cash. Bitcoin Core supporters accuse Cash adherents of trying to steal the Bitcoin brand and leverage the popularity to boost its value.
When talking in practical terms, the burning’s strategy and its overall impact on Bitcoin Cash is still unclear. Other cryptocurrencies like Ripple practice a similar approach to lessen the amount of coins available and increase value, but experts are still on the fence whether it actually has a physical effect on the price.
Kate is market industry expert who has spent majority of her life on wall street, she has thought to have a knack at picking the right stocks to invest into. With the rise in cryptocurrencies she has is now able to use her expertise to a new market and give us insights on what we can expect in the present and the future.