Bitcoin Cash is nearing a major upgrade. The fourth-largest cryptocurrency recorded a price per token of $1,455.25 on Monday, with a market cap of $24.9 billion that gives it a valuation nearly double that of competitor EOS. The new upgrade is set to re-open old arguments about the role of Bitcoin Cash, and there’s evidence to suggest the upgrade could lead to big movements in the markets.
Bitcoin Cash Hard Fork: OK, Hold Up, What Does That Even Mean?
First, a quick primer. What is a “hard fork”? Bitcoin Cash was created as a “fork” of the original Bitcoin in August 2017, largely over disagreements about mysterious inventor Satoshi Nakamoto’s original vision for the cryptocurrency launched in 2009. The Bitcoin network stores transaction data in “blocks” which add onto a global chain (hence the term “blockchain”), and around one new block is added to the chain every 10 minutes. Bitcoin’s block size has remained at one megabyte, and Cash supporters claim it needs to expand to continue working as a viable means of transferring value internationally. Bitcoin Cash launched with a block size of eight megabytes, which potentially means more transactions processed at once.
This new upgrade, set for Tuesday, is known as the Adjustable Blocksize Cap upgrade. It quadruples the size of the block to 32 megabytes, while also enabling smart contract creation. The upgrade has a number of implications for speed and decentralized apps, also known as “dapps.”
“A larger block size means that the network will have a better transaction throughput which should help it on its way to commercial adoption,” cryptocurrency blog CaptainAltCoin writes, which predicts a continuation of the coin’s upwards trend. “Smart contracts mean that Bitcoin Cash will become a suitable platform for people to develop Dapps on. With its improved block size it should have transactions that will be faster and more scalable than Ethereum, currently the main Dapp platform out there.”
Bitcoin Cash Hard Fork: Price Predictions and What It Means for Investors
One of Bitcoin Cash’s biggest proponents, Roger Ver, has gone one step further. In an interview with The Independent last week, he predicted that “big investors coming in soon could see it double again by next week” because “people love to chase a rising star.” Beyond the week, he predicted the cryptocurrency reaching a price of “hundreds of thousands of dollars” with Bitcoin Cash possibly overtaking Bitcoin before the end of 2020.
Not everyone is supportive of the upgrade. Dutch exchange BL3P is using the fork as an opportunity to remove Bitcoin Cash altogether. In a Monday update, the company said: “Since there already was a planning for the removal of Bitcash, the hard fork has become a reason and strict deadline for the removal of Bitcash from BL3P.”
Tom Lee, analyst at Fundstrat Global Advisors, has also taken the opportunity with the hard fork to reiterate his support for Bitcoin. In an interview with CNBC on April 24, days after the announcement of the hard fork, he recommended the cryptocurrency over Bitcoin Cash because “if I was putting new money to work, a fresh dollar, I’d be much more interested in buying a laggard that could attract inflows, rather than something that is potentially overbought.”
Whether the upgrade excites the markets, or whether it results in more investors moving their money elsewhere, remains to be seen.