Helena Izotova
Bitcoin is making everyone nervous again. Bitcoin miners start panicking, and the panic is driven by the news that Bitcoin Cash and some other cryptocurrencies are crashing again, Market Leader reports.
Bitcoin Cash has been going down in value for a week or so. Over the last few days, the cryptocurrency has lost 21%. Yet, Bitcoin Cash is not the only one to make people worry. There are some other digital currencies that have been going down as well. Out of the 10 most popular digital currencies, Bitcoin and Ripple are the only ones that showed positive dynamics last week. However, Bitcoin Cash turned out to be the biggest loser of the week as compared to other popular digital currencies.
Around a week ago, Bitcoin Cash cost $457 per unit. On October 3rd, the price lunged below the $400 threshold. After that, the price went even lower and accelerated the downtrend. At this point, Bitcoin Cash costs under $350, according to coinmarketcap.com. At the same time, the analytic department of NordFX reports that Bitcoin Cash is currently trading around $366 per unit in South Korea.
Downtrend Triggered by Miner Games, Experts Assume
Apparently, as the price of Bitcoin Cash went down, this also affected the currency’s market capitalization. As a result, the market cap went below 6 billion dollars. The stats show that for the first time since September 15th, Ripple managed to become the world’s 3rd most popular digital currency after outpacing Bitcoin Cash by 2,2 billion dollars of market cap.
Some of the drawdown can be explained by some changes made to the level of complexity (EDA) in the BCH network. The EDA is triggered when there are too many blocks in the chain. This mechanism makes life much simpler and easier for miners. In such cases, as a rule, miners switch from Bitcoin to Bitcoin Cash, which sharply increases the hash rate in the BCH network. At the same time, most miners prefer to cash out instantly, which is why such periods exert extra pressure in the Bitcoin Cash exchange rate. Eventually, the increased hash rate restarts the EDA, which regulates the level of complexity. Against such mechanisms, the profitability of mining BCH goes down considerably, which is why most miners go back to the Bitcoin network.
It’s common knowledge that most miners use EDA to maximize their profits. Playing with the hash-rate volatility wisely and timely makes them more money. At the same time, EDA is one of those things that are essential to the survival of Bitcoin Cash, experts say.
Helena Izotova
