The cryptocurrency market is experiencing a complex shakeup this weekend, with a recently created digital token called Bitcoin Cash (BCH) up almost 130% in two days, even after retreating substantially from an even bigger spike.
The BCH/BTC exchange rate is hitting its highest level since September, rising 50 percent in today's trade.
The cryptocurrency skyrocketed to an all-time high of $2,500 a coin early Sunday morning.
Bitcoin Cash's market cap reached a high of $40 billion following the price rise - cementing its place as the second-biggest cryptocurrency, behind Bitcoin. Ethereum founder Vitalik Buterin even chimed in on the news in a tweet late Saturday night to congratulate the coin's main backers.
Any investors, therefore, that see bitcoin more as a currency than a store of value might be choosing to buy into Bitcoin Cash now that Segwit2x had been scrapped, Bertani said. When they announced its cancellation this week, Segwit2x organizers concluded that forcing a fork, or the creation of a separate 2x network, would "divide the community and be a setback to Bitcoin's growth".
By 12 p.m. ET, bitcoin was back up at $6,160.
The rivalry stems from a cancelled update (known as SegWit2x) to the bitcoin protocol, which would have doubled Bitcoin's block size (or transaction files) to 2 megabytes, and which failed to gain sufficient support. Backers thought the plan would help the digital currency scale faster.
This would have allowed greater capacity and ability to transact using Bitcoin, so the failure to push this through and "fork" has seen huge capital rotating out of Bitcoin and into Bitcoin Cash.
Trading volumes for Bitcoin and Bitcoin Cash rose to unseen records, boosted by the Korean markets.
On the US -based Bitfinex exchange, Bitcoin hit a low of $5,426.00, its lowest since October 25 before pulling back to trade at $6,143.30 by 04:49 AM ET (09:49 AM GMT), still down 2.5% for the day. I know many Bitcoin OGs who have dumped $10m+ of BTC for BCH.
With a block size of 8MB and several teams of developers that are competing to create a better version of Bitcoin, today's price action across cryptocurrency markets shows that it is well on track.
Goldman Sachs experts predicted that Bitcoin prices will consolidate near the $8,000 mark for some time before continuing its surge, the CoinTelegraph reported.