This main reason is why Bitcoin Cash's sudden 14% rally will not continue
The crypto market recovered like crazy on Friday. Bitcoin, Ethereum, XRP and all other altcoins soared and recovered at prices that hadn't been seen in days.
While this was remarkable in and of itself, since BTC made it the 8th 00 Reaching $ 0 price point on a daily basis, a strange trend was discovered: all Bitcoin hardforks, from Bitcoin Cash (BCH) and Satoshi Vision (BSV) to the more obscure Diamond-Fork, everyone saw a price increase.
BSV won a stunning 40% increase, while BCH, the largest fork of the original Bitcoin-Chain, saw a 14% increase. While this sudden surge has convinced many investors that these altcoins are correct, there is one main reason that Bitcoin Cash and other forks price rallies might not last in the medium term.
Why is Bitcoin Cash so strong?
First we have to break down why BCH has been so violent in the past 24 Has seen price movement. The hard forks skyrocketed when it was announced that Dr. Craig S. Wright, the Australian cryptographer and coder who claims to be the creator of the Bitcoin blockchain, had previously produced documents in a lawsuit suggesting that he has control over a third “Tulip Trust” that is a giant Could hold the sum at BTC, probably worth several billion dollars in Bitcoin.
New: Craig Wright just so happened to have a third “Tulip Trust” set up to hold that missing $ 10 billion fund.
He sent the info about the “Tulip Trust III” in a document dump of 428 dossiers.
Can someone involves in this mess pls send me $ 1 million to keep going? pic.twitter.com/zAcI9Wohn9
– Brendan Jay Sullivan (@MrBrendanJay) January 9 2020
If Wright actually has the means and takes control of it, he would throw BTC en masse and at the same time drive up Bitcoin SV's price. This is more than just speculation, as the self-proclaimed Bitcoin inventor has only claimed that he intends to destroy the Bitcoin market for the benefit of his cryptocurrency.
But Wright has repeatedly proven that his statements more than often are not true, so this scenario is rather unlikely and unreliable.
Why the rally is not sustainable
We can only convey this one main reason, which indicates that the price for Bitcoin Cash and Bitcoin Satoshi Vision will not last long. While altcoins are coins with their own blockchains, both BCH and BSV have anchored the halving function in their protocols, just like Bitcoin. Analysts expect the next halving of Bitcoin to push BTC's price higher, though one suspects that the halving for BCH and BSV may “lead to their final demise”. Benjamin Celermajer of Coinmetrics and Magnet Capital recently explained in an extensive thread on Twitter why he believes this is the case.
“In April, when miners receive half of the BCH and BSV rewards they are currently receiving, their winnings will be halved (unless , the price doubles). This will cause miners to start mining Bitcoin, whose profitability will only decrease in May. ”
1 / In the first 3 months following the Bitcoin Cash fork, block production was abnormally high which resulted in the Bitcoin Cash blockchain having 9, 887 more blocks than Bitcoin at its maximum pic.twitter.com/6M8tge4mRY
– Benjamin Celermajer (@CelermajerB) January 8 2020
This simple dynamic, he wrote, is likely to cause “massive market fear and surrender” among investors in the two main Bitcoin hard forks, “which may lead to their short-term and long-term demise”.
Proof of text: newsbtc