Bitcoin Hard Fork and Ethereum Hard Fork
Stock splits are not uncommon. Usually undertaken when a company’s shares rise to an undesirable value that is too high—and therefore may dissuade smaller investors—stock splits are a great way to create hype around a company and also encourage investment. In cryptocurrencies, however, splits are entirely different.
Between the Bitcoin hard fork (the term used to describe a split in cryptocurrencies) and the Ethereum hard fork, we’ve seen two of the heaviest hitters on the market place fracture into entirely new coins, which only creates more volatility and presents more options to investors. Seeing as how the Ethereum (ETH) split occurred over a year ago, what can investors hope to learn about the ETH vs. BTC split? Where will that land the Bitcoin Cash price 2018?
While cryptocurrencies are notoriously hard to predict, we’re going to try to do just that in this piece as we look at the Ethereum hard fork and use that information to help us suss out what the still-fresh BTC split will mean down the line.
Ethereum suffered a hard fork split after a faction of owners did not like certain changes that were being instituted in order to prevent a certain type of hacking that had been occurring. Why would they be against hacking protection? Well, in order to answer that, we need to delve deeper into the reason cryptocurrencies exist in the first place.
You see, cryptocurrencies aren’t stocks. While the word “currency” is in the name, that doesn’t aptly describe them either—or at least not yet, as a good number of cryptocurrencies are still not accepted as payment by a majority of stores and companies.
And cryptocurrencies aren’t only about making money, at least not to some. While you may or may not support a company you invest in, ultimately those stocks are representative of a product or service that the company hopes to turn into profit.
In the world of cryptocurrencies, however, the goal can often be loftier. For many of those who purchased coins, cryptocurrencies represent not just a way to make money, but the future of payment systems as we know them, not to mention a way to counter what these diehards often view as an overly powerful collection of central governments with the ability to have an outsized effect on traditional fiat currencies.
(Data source: “Bitcoin Cash,” CoinMarketCap, last accessed August 10, 2017)
What that translates into is that there are many coin owners who view their purchase as a philosophical stance and not a profit-based move, or at least, not an immediately profit-based decision. For investors, that can quickly turn dangerous.
In the case of Ethereum, it did for a good bit as the hard fork split, which resulted in the creation of Ethereum Classic (ETC), cost ETH a fair bit of goodwill and trust, hurting the value of ETH in the immediate aftermath.
Ethereum lost nearly half its value in the time between the month before and the month after the split. What is now the-second largest cryptocurrency by market cap didn’t see significant gains until several months later.
But then something strange happened. As ETH began to rise in 2017, ETC followed it. While the prices never came close to matching up, in terms of percentage gains, the two showed remarkable growth of over 1000%, each at the height of their respective success.
Both of course were eventually brought down from their highest numbers, but they still have demonstrated great potential and strong growth so far this year. In fact, ETH was probably the best buy at $10.00 per coin earlier in 2017, catapulting to about $300.00 right now.
So that covers what happened to ETH after the ETC split; how can we use this to make projections about the BTC vs. BCH split?
BTC vs. ETH and BCH vs. ETC
While we will be using the ETH vs. ETC split to help inform our projections about the BCH price 2018, what we also need to do is consider the differences.
The first big difference is that ETH was still a relative new and untested commodity on the scene in July 2016 when the split occurred.
Now, ETH has the second-largest market cap at near $28.0 billion and rising. The coin is attempting to be a serious challenger to the biggest coin on the market, Bitcoin, and there are a great many reasons to be excited about the Ethereum price 2018.
But, as I said, no one could prove that would be the case back during the split.
Bitcoin, however, is very much in the second part of this phase. While ETC was unproven, BTC has shown itself to be resilient and favored by a good number of investors and market players.
After the disaster that was the Mt. Gox hack that cost the coin both reputation and value, BTC struggled to once again topple the all-time high it had set before the hack.
But now those problems are a distant memory as Bitcoin is the largest cryptocurrency in the world by market cap and name recognition, and has surpassed $3,000 per coin, with no signs of slowing down.
This makes investors question why they would want to leave what is seemingly a gravy train that keeps paying off and instead jump on some untested, unproven, new spin-off. It just doesn’t make sense.
And that’s why the fallout of BCH has been so different versus the fallout caused by ETC.
In the case of Bitcoin Cash, the new cryptocurrency was only able to briefly delay Bitcoin’s rise, while BCH experienced highly volatile and dramatic swings.
Bitcoin, meanwhile, passed that $3,000 mark I mentioned earlier during this period of turmoil for BCH.
Which proves that BTC has become extremely resilient to challengers—even when those challengers break off from the cryptocurrency itself.
Now that doesn’t mean that Bitcoin Cash didn’t have legitimate reason for breaking off. The BCH backers were concerned about the slow rate and low size of transactions, both of which could lead to an ETH takeover should Ethereum find itself able to one-up BTC in those areas. So their attempt to push BTC towards focusing in on these areas of need was a good idea. The bad idea was to split.
Because right now, BCH is a volatile and nearly unpredictable mess that has day traders and other quick-buck investors circling it, ready to make a dollar and jump ship when the moment is right.
For the vast majority of investors, that’s no position they want to be in, especially when other options present themselves as far superior (including ETH, ETC, and BCH).
Bitcoin Cash Price (BCH) Price 2018
So BCH may not be the right investment for most investors right now, in my opinion, but what about the Bitcoin Cash price 2018? Would that be a suitable time for investors to jump in on Bitcoin Cash?
That’s where the ETC comparison comes in handy. As we saw with Ethereum, ETC ended up mirroring its older sibling, gaining when it gained and falling when it fell. This was naturally good news for ETC investors, even if their gains weren’t as strong as ETH, because they still experienced massive upticks in value.
Which brings us to the BCH vs. BTC debate. The thing is, I believe that BCH will largely ape the BTC price chart moving forward, jumping when BTC jumps and crashing when BTC crashes.
Now, I doubt that the Bitcoin Cash price will ever rival that of Bitcoin, let alone outperform its older sibling, but that doesn’t mean that these gains aren’t impossible.
For instance, if BCH can deliver on its promise to speed up transactions as well as reduce size limits, we could be looking at a better overall coin than BTC. Although I doubt even with those technological buffs that it will be able to surpass Bitcoin, these technological innovations could end up pushing the Bitcoin Cash price higher in terms of performance versus its older sibling.
Now, again, that’s a big “if.” There’s still a lot BCH has to prove before I go bullish on the Bitcoin Cash price 2018. But what I do believe is that the cryptocurrency market in general is frothy and will be one of the hotter markets for years to come.
Between the four mentioned cryptocurrencies in this piece, I believe that ETH is ultimately in the best position for a 2018 surge.
While Bitcoin continues to grow and grow, its size may ultimately limit it, while ETH is still very much at a comfortable price with a proven track record that it can show huge gains.
Not to mention that new innovations are coming to ETH, like a radical redefining of the mining model to create new coins, which could dramatically shift the balance in the market away from BTC towards Ethereum if the technology proves itself to be head-and-shoulders above its competitors.
And in that case, not only would the Bitcoin price 2018 suffer, but the Bitcoin Cash price 2018 would also take a nosedive.
My advice is this: Look for ETH to make big moves and keep a close eye on BCH just in case it does seem ready to turn things around. But for now, it might be best to stay away from BCH because it is far too risky an investment at this time in its life cycle.