The market capitalisation of Bitcoin’s August 2017 hard fork, Bitcoin Cash, briefly exceeded that of the native cryptocurrency on the Ethereum blockchain, Ether, in the early hours of Sunday morning. The Bitcoin offshoot’s price surged to an all-time high of $2,577 at around 1:49am. It has since settled back into third position at a total market cap of $23.35 billion or $1389.62 which is still more than double the currency’s previous all-time high. It sits behind Ether at $30.22 billion and the original Bitcoin chain at $106.62 billion.
The most likely cause of such an extreme upswing was the calling off of another planned hard fork to the original chain. The Segwit2x proposal aimed to increase the size of the blocks that make up the blockchain from 1MB to 2MB. This would allow more data in each block and thus more transactions could take place more quickly. It was the result of a compromise between groups of developers who had long fought over how to best scale the network. However, the nature of the agreement that took place in New York in Summer was controversial for many and a highly divisive issue.
The Segwit2x fork was due to take place later this month on block number 481,824. However, it was announced last Wednesday that no attempt to fork the network would take place for now. The reason cited was lack of support.
Following the news, a brief surge in the price of Bitcoin (BTC) occurred, taking it to new highs of $7,879. This quickly reversed and the price crashed to a monthly low of $5,507. Interestingly, whilst many altcoins gained from the selloff, Bitcoin Cash favoured particularly well. This prompted more selling. This time it was the alts and additional money flooded into Bitcoin Cash. A large portion of this volume was in South Korean won. However, the majority was exchanged for BTC.
Trevi Digital Assets Fund manager Jacob Eliosoff told Forbes that he felt it understandable that the proponents of Segwit2x have turned to Bitcoin Cash. For him, they’ve:
… nowhere to turn but BCH. It’s not surprising that SegWit2x’s loss has been Bitcoin Cash’s gain.
Ethereum founder and general god-father, Vitalik Buterin, quickly congratulated some of the largest name’s on the “big block” side of the scaling debate. He Tweeted:
The brains behind the briefly displaced blockchain also posted this picture of industry market analyst website Coinmarketcap confirming that BCH has become the second most dominant name in the cryptocurrency space.