On August 1st, 2017, the entire world of cryptocurrencies changed. The thing is that from now on, there are 2 forks of the world’s first and most popular cryptocurrency, which also enjoys the biggest market capitalization among its peers. We are talking about Bitcoin (BTC) and Bitcoin Cash (BCC). The split was followed by increased market volatility for both currencies, which was mostly of technical nature caused by the circulation of Bitcoin Cash rather than the classic supply and demand, experts say.
Reasons for Creating Bitcoin Cash
Now everyone seems to wonder what exactly caused the split of the world’s most stable cryptocurrency. The experts at Dukascopy Bank, which has been one of the leading players in the industry of online trading for years, say that the major reason for that is the exponentially increasing load on the Bitcoin block chain caused by the market craze around the so-called ICOs, which is basically a new way to attract investments in risky assets. The amount of transactions is numbered in something that is well above thousands while the speed of creating block chains and their sizes don’t scale accordingly, which leads to costlier transactions. At the same time, under such circumstances, those transactions with low mining fees may stay out of the block chain for days.
Apparently, all of that didn’t make Bitcoin more attractive for investors. That’s why the Bitcoin community spent around 18 months looking for possible scalability solutions. Dukascopy Bank reports that savvy investors foresaw the split of Bitcoin and its community, and that’s why they started reducing their exposure to Bitcoin and other cryptocurrencies and cashing out in order to avoid unexpected losses on possible market volatility and to be able to buy cheap later on if there is another market crash. This made Bitcoin’s market capitalization drop from 110 billion dollars all the way down to 90 billion dollars right before the split. At the same time, Bitcoin dropped from $3000 down to $2300 per 1 BTC.
However, the exchange rate recovered and even set a new all-time high. For example, on August 8th, when the situation stabilized, 1BTC cost $3450 while Bitcoin Cash stabilized around $300 despite the fact that since August 1st, when Bitcoin Cash came into existence, its market capitalization had already reached 10 billion dollars, which temporarily made it the world’s 3rd biggest cryptocurrency market.
The experts working for Dukascopy Bank remind you that some exchanges started getting ready for the split in advance, without having to wait for an official press release. The reason is, those exchanges knew that the split would happen anyway. OKEx and Coinbase were some of them. That’s why they suspended Bitcoin transactions for a while right in advance of the split. At the same time, they reassured the community that they would work with both versions of Bitcoin if the split took place.
Future of Bitcoin Cash
КNow we know that they were right. It should be noted that the developers of Bitcoin Cash decided to increase the size of a block from 1Mb all the way up to 8Mb to make the system more powerful. At the say time, they improved some internal protocol mechanisms.
Also, the idea of creating Bitcoin Cash was supported by many exchanges, miners and BTC wallet owners. Moreover, a lot of miners reset their mining capacities to focus on mining Bitcoin cash while the developers made sure to make storing and exchanging Bitcoin Cash as well as making online purchases a convenient process.
Now millions of investors and wallet owners wonder whether they can use Bitcoin Cash instead of Bitcoin. Dukascopy Bank explains that it’s possible on condition that both the participants of the transaction agree to this payment means. However, it would be impossible for frauds to palm Bitcoin Cash off on unsuspecting users instead of Bitcoin.
As for buying and selling Bitcoin Cash, it’s necessary to go to an online exchange specializing in cryptocurrencies. You can spend both variants of Bitcoin independently, provided that your wallet supports BCC.
Also, the experts working for Dukascopy Bank shared their view on the future of Bitcoin Cash. They think that it’s too premature to make some specific predictions since Bitcoin Cash is very young and the international community is just getting used to it. So, Bitcoin Cash may either devalue or make rival to Bitcoin over time. The future will depend on several factors. The list of challenges includes solving the problem of Bitcoin scalability with the help of SegWit2x as well as the market reaction to Bitcoin Cash including the global demand and the popularity with miners.
About Dukascopy Bank
Dukascopy Bank is one of the leading online Swiss banks and one of the biggest liquidity providers in the forex industry. When trading directly through Dukascopy Bank, traders get considerable advantages, including reduced commissions and spreads. Dukascopy Bank clients have permanent access to the company’s top-notch trading solutions as well as a wide range of assets to trade, including currency pairs, CFDs, metals, binary options, and a range of exclusive bank and financial products.
Dukascopy Bank is all about Swiss quality and reliability. That’s why it has been one of the leading players in the industry for years. These are not just empty words. Dukascopy Bank is regulated by the Swiss Financial Market Supervisory Authority (FINMA). The bank participates in “Swiss banks and securities dealers’ agreement regarding deposits protection”, according to which Dukascopy Bank’s clients are insured to the amount of up to 100 000 Swiss Francs. If you have deposited funds with the bank’s EU office – Dukascopy Europe, which is regulated by European financial watchdogs – the insurance amounts up to 20 000 Euros per clients. Also, the bank backs the safety of client funds due to an exclusive capital protection system.
Dukascopy Bank is headquartered in Geneva and has offices all around the globe, including Moscow, Tokyo, Riga, Hong Kong , Shanghai, and Kuala Lumpur. It employs over 300 highly-skilled professionals.
Dukascopy Bank’s trading environment includes:
- tight spreads
- safety of client funds guaranteed by the Swiss financial regulator
- wide range of assets, including gold accounts, interbank and managed accounts, which can be opened in multiple currencies, including USD, EUR, RUB, GBP, JPY, CHF, AUD, PLN, CAD, DKK, HKD, MXN, NOK, NZD, CNH, SEK, SGD, TRY and ZAR
- multiple deposit and withdrawal options – debit/credit cards, bank transfers, online payment systems etc.
- ECN liquidity (100-200 million dollars for major currencies)
- several high-performing trading platforms – SWFX, JForex, web platform, mobile apps etc.
- several types of trading orders, instant execution
- all kinds of trading are allowed, including manual trading, trading robots, scalping, hedging, and so much more
- automated and social trading
- trading strategy constructor
- common pricing and liquidity for all types of clients
- cutting-edge technologies and exclusive solutions
- 24/6 support by phone
- access to professional market analytics and news
- tech and financial stability
- several bonuses and loyalty programs
- education programs designed to teach beginners how to trade financial markets effectively
As for Dukascopy Bank’s exclusive online trading software - Swiss FX Marketplace (SWFX) – this is one of the most popular products created by Dukascopy Bank. The software’s API is connected to 20 major banks around the globe, which created the biggest ECN liquidity pool in the forex environment. Thanks to this solution, Dukascopy Bank offers you an exceptional level of order execution, excellent quoting, and tight spreads. If you need more information on the platform, please go to the company’s official website at https://www.dukascopy.com/
