Friday marked a new hight for Bitcoin as it soared above $8,000 for the first time before taking a nosedive back down to $5,600. Meanwhile, bitcoin’s cousin bitcoin cash managed to quadruple its value that same evening. Analysts are left questioning how the value of bitcoin cash is going to influence Bitcoin’s value in the near future, particularly in a negative manner.
Bitcoin has been going through some changes in the past few weeks. Individuals associated with Bitcoin including investors, miners, and developers who wondered how the fork with the SegWit2x protocol would impact the currency’s value. A shock came when just days before the split was supposed to occur, the people behind the split canceled it and decided that it was more beneficial for cryptocurrency if unity was the focus instead of segmentation.
The biggest question surrounding Bitcoin and other cryptocurrency is how to handle the scaling with additional transactions occurring on the market. Interested parties note that the current software associated with Bitcoin needs to be updated to handle the increased interest and activity in the cryptocurrency market. There has already been one fork in the past, and proponents of another state that the currency needs to be scaled if it’s going to ever compete with mainstream payments.
The first fork ended up in the creation of Bitcoin cash. The fact that cash has continued to increase in value while the original Bitcoin isn’t making the same kind of gains indicates that there may be problems in the community that could present issues in the future.
There is potential for bitcoin cash to negatively impact the original Bitcoin, but it’s not safe to say that the only impact on Bitcoin is the introduced of cash when the fork occurred. The two are in direct competition with each other for the same pol of investors, meaning that a change in one will likely directly impact the other. The potential also exists for another type of cryptocurrencies such as Ethereum or Litecoin to take over the dominating part of the market, but this has yet to happen in the market. The rise of other forms of cryptocurrency could happen sooner rather than later if another hard fork happens in the future to split interest in the original Bitcoin.