Why did the price of Bitcoin Cash rise?
The Bitcoin Cash (BCH) cryptocurrency rate reacted with a sharp jump to the news about the launch of the crypto exchange for institutional investors EDX Markets and doubled in less than a week, writes RBC Crypto.
Cryptocurrency began to rise in price after the news about the launch of EDX Markets, a cryptocurrency exchange for institutional investors in the United States, which was supported by such large financial companies as Citadel Securities, Fidelity Digital Assets and Charles Schwab. The new exchange offers trading in four cryptocurrencies, including Bitcoin Cash (BCH). The other three assets on EDX are Bitcoin, Ethereum (ETH), and Litecoin (LTC). A week earlier, BlackRock had also applied for an exchange-traded fund (ETF) for bitcoin, which also added to the market optimism.
At the time of publication, the Bitcoin Cash rate is at around $220 in a trading pair with the USDT stablecoin on the Binance exchange. The coin occupies the 19th line of the CoinMarketCap rating with a market capitalization of about $4.3 billion. The capitalization of bitcoin exceeds $589 billion, the first cryptocurrency accounts for more than half of the total capitalization of the entire cryptocurrency market. The price of bitcoin is at the level of $30,000, having fallen slightly below the annual maximum reached last week. LTC has risen in price by about 12% since the launch of EDX, and ETH by 7%.
Cryptocurrency Bitcoin Cash appeared in 2017 as a modified copy (fork) of Bitcoin itself with an increased size of transaction blocks. This approach made it possible to make payments in BCH faster and cheaper compared to the “original” bitcoin, but did not solve a number of other technical problems, including due to the lack of support from interested professional developers. Proponents of the promotion of Bitcoin Cash, the most famous of whom is Roger Ver, positioned it precisely as a currency for everyday payments, as opposed to Bitcoin as a store of value.
“Low Base Effect”
Bitcoin Cash has long remained “a weak asset that has lost most of the development team,” comments Viktor Pershikov, an analyst at the cryptocurrency market. The attractiveness of the coin for miners was also in question, and the development of its ecosystem as a crypto project lost not only to new tokens and more scalable projects, but also to Bitcoin itself as a leader in terms of use as a payment instrument.
The second important factor, in his opinion, was the fact that BCH appeared as an asset on the EDX Markets exchange. The choice of an asset is understandable, since it has almost no risk of being recognized as a security, which means that it can be traded without the risk of facing the actions of regulators, Pershikov notes. Thus, American investors “saw this as a signal to buy an asset,” which in the future could become a legally traded cryptocurrency in the United States.
In early June, the US Securities and Exchange Commission (SEC) filed lawsuits against the world’s two largest cryptocurrency exchanges, Binance and Coinbase. The regulator brings a number of charges against both, the main of which is the recognition of a number of cryptocurrency assets that are traded on the sites as unregistered securities that fall within the competence of the regulator.
American regulators have repeatedly said that bitcoin is not like a security, notes Nekrasov. If both BCH and LTC are bitcoin forks, then they are unlikely to be classified as securities, the expert is sure. At the same time, with ETH, “the issue is moot,” he adds, but in recent years, the rhetoric of regulators has been “rather supportive than repressive” in relation to this cryptocurrency. Now, against the background of the SEC lawsuit against Coinbase and the recognition of a number of large altcoins as securities, investors are redoubled about which cryptocurrencies to invest in.
As with BCH, the other assets, LTC ETH and BTC, are “selected precisely for their neutrality,” adds Pershikov. Only ETH may be of interest to US regulators in terms of evaluating it as a security, the analyst clarifies. But until now, the SEC has not characterized Ethereum in this way in its assessments, so this asset is “protected in a certain sense.”
Source: bitcoinlinux.com
