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Why is Bitcoin Cash Trading 42% Higher Ahead of its November 15th Hard Fork?

Nov 06, 2018


  • Bitcoin Cash (BCH) was created on August 1st, 2017 after Bitcoin (BTC) daily transaction volumes reached levels that were consistently causing long transaction confirmation times and high transaction fees. To handle growing transaction levels, BTC developers built the SegWit2x protocol to remove block size limits and implement off-chain storage solutions into the Bitcoin Blockchain. SegWit2x was activated on the Bitcoin blockchain on August 1st, 2017 with support from 95% of the mining community.
  • While speaking at the Future of Bitcoin conference in Arnhem, Netherlands prior to SegWit2x’s activation, Amaury Sechet, a former Facebook engineer, announced a protocol called Bitcoin ABC that would go on to serve as the underlying protocol behind the Bitcoin Cash network. Bitcoin ABC was different from SegWit2x because, instead of throwing away a block size limit, it imposed a 32MB limit on block sizes.  
  • Upon Bitcoin ABC's announcement, a group of Bitcoin developers and miners decided to completely abandon SegWit2x and throw their weight behind Bitcoin ABC. From August 1st, 2017 and on, Bitcoin’s blockchain and Bitcoin Cash’s blockchain have existed as two separate networks.
  • BCH has risen 41.8% from USD$425.65/token on November 2nd, 2018 to USD$603.53 in today's trading as investors are preparing for a scheduled Bitcoin Cash hard fork on November 15th, 2018. Although the Bitcoin Cash blockchain hard forks twice a year in order to implement scheduled network upgrades, the scheduled November 15th, 2018 hard fork is proving to be the most contentious yet.  
  • Currently, two different packages of Bitcoin Cash network implementations for the November 15th, 2018 hard fork are being debated amongst community members:
  • The first proposal, Bitcoin ABC, is considered the leading implementation and would implement features such as smart contract abilities, Oracle services, and scaling improvements (that would not alter block sizes) to the Bitcoin Cash blockchain.  
  • The second proposal, Bitcoin SV, would replace pre-existing Bitcoin ABC protocols with its own while expanding the block size limit from 32MB to 128MB.
  • Both proposals have gained significant support from various stakeholders in the Bitcoin Cash community. Many investors believe that support is so divided between the two proposals that it will cause a split of the current Bitcoin Cash blockchain into two.
  • Binance, Coinbase, and other large cryptocurrency exchanges have publicly announced that they would support both sides of the hard fork.  
  • Andrew Stone, a lead Bitcoin Cash developer, recently introduced a solution to the Bitcoin Cash hard fork debate: a proposal he calls Bitcoin Unlimited. Bitcoin Unlimited would implement network changes proposed by both Bitcoin ABC and Bitcoin SV, however, the changes would be dormant. Upon Bitcoin Cash miners upgrading to Bitcoin Unlimited, the actual implementation of features could be voted on by miners or approved through emerging consensus.
  • So, why has BCH’s price risen 41.8% as a large part of this news has developed over the last four days? Upon the activation of a hard fork on the Bitcoin Cash network, wallets that hold BCH will receive duplicate copies of their BCH specific to the newly established network. Discussions of a split among the Bitcoin Cash community between Bitcoin ABC and Bitcoin SV have caused investors to speculate that BCH could split into two separately maintained cryptocurrencies, similar to what happened between BTC and BCH last August. Investors may be buying BCH in preparation for the November 15th, 2018 hard fork as they believe they will receive two newly established tokens backed by two separate communities.
  • Unless further developments related to the matter break, demand for BCH will likely hold steady as the November 15th, 2018 hard for draws near. Crypto investors have desperately sought-after upside potential as the crypto bear market has held steady in 2018, and this BCH buying opportunity does just that. In the weeks that follow after the Bitcoin Cash hard fork is activated on November 15th, 2018, we expect to see a pullback in BCH prices as investors sell-off the token due to the lack of remaining upside potential.