Home / Technology / New ‘bitcoin cash’ crashes 30% Friday in volatile first week

New ‘bitcoin cash’ crashes 30% Friday in volatile first week

Bitcoin is holding up well against its offshoot rival in its wild first week of trading.

The new “bitcoin cash” plunged 30 percent Friday to below $300, while the original cryptocurrency edged higher and approached $2,900, nearly triple in value for the year.

Bitcoin split into bitcoin and bitcoin cash Tuesday, and the new digital currency has swung dramatically amid limited trading access. Bitcoin cash leaped from around $220 to above $700 briefly Wednesday, before crashing Friday to $287 in early afternoon trade, according to CoinMarketCap, which tracks prices across exchanges.

Digital currency enthusiasts attributed the decline in the last day to an increase in exchanges accepting deposits of bitcoin cash.

Bitcoin cash one-day performance

Source: CoinMarketCap

Investors who held bitcoin on most exchanges as of Tuesday morning, when the split happened, should have automatically received the equivalent amount of bitcoin cash.

A major digital currency exchange, Bitfinex, tweeted Friday morning it now accepted bitcoin cash deposits and withdrawals, while another large exchange, Bittrex began accepting bitcoin cash deposits Thursday. Popular digital currency wallet, or storage site, Trezor, also announced Thursday that it restored customer access to bitcoin cash.

Coinbase’s GDAX exchange initially said it would not give customers bitcoin cash, but announced late Thursday it would support the new currency by Jan. 1, 2018.

“I suspect the price drop is people selling newly minted” bitcoin cash, said Brian Kelly, a CNBC contributor and CEO of BKCM, which runs a digital assets strategy.

Nearly two-thirds of trading in bitcoin cash was being done in bitcoin, and about 43 percent of those transactions were conducted on Bittrex, according to CryptoCompare. U.S. dollar transactions in bitcoin cash accounted for 22 percent, the site showed.

The original bitcoin traded Friday nearly 3 percent higher at $2894.91, holding near Tuesday’s highs, according to CoinDesk. Bitcoin hit a record high of $3,025 in June, briefly more than tripling in value for the year.

Rival digital currency ethereum traded 2 percent lower near $219, according to CoinDesk. Ethereum has surged more than 2,000 percent this year.

Bitcoin this week

Source: CoinDesk

Bitcoin split into two versions Tuesday morning after a minority of digital currency developers decided to go ahead with their own upgrade process. Bitcoin cash removed compatibility with a more popular Segregated Witness upgrade proposal and expanded the size of the block — which limits the speed of transactions in the digital currency — from bitcoin’s 1 megabyte to 8 megabytes.

Bitcoin cash supporters such as early bitcoin investor Roger Ver say the currency is closer to the original developer’s intentions.

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