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Around this time of last year, many cryptographic retail investors have subscribed to the economic theory that cryptocurrant forks – those that result in irreversible network splits and the creation of new blockchains – were a net positive for their wallets. "How could they not be?", They asked. "It's free money!"
In fact, at that point, the two most important cryptocurrency forks – Ethereum Classic and Bitcoin Cash – had both proved to be an advantage for investors who held coins on both sides of the division. However, both forks occurred just before or in a historic cryptographic market rally that masked weak fundamentals in a variety of projects. Absent the type of black swan event that the cryptocurrency market experienced last year, it seems that when it comes to really controversial hard forks, the whole may be less than the sum of its parts.
Bitcoin cash price craters in the month following the fork
By way of proof, it is not necessary to look beyond Bitcoin Cash (BCH), which in turn is cowering in the wake of a severe setback that took place in a prolonged downward market rather than in a market expansion dictated by the sale retail.
Before the fork, the cash price of the bitcoin was trading close to $ 500 with a $ 8 billion market cap that ranked fourth among the cryptocurrencies. In the following month, BCH fell to only $ 82 on Coinbase, with a decline of more than 80%. If you subscribe to the "Bitcoin Cash is Bitcoin" philosophy, the price of bitcoin is traded at its lowest price since the beginning of 2013. Even if you do not, the bitcoin money is still down 98% from its all-time high and now it is at a historical low.
Part of that lost economic value has not completely abandoned the Bitcoin Cash ecosystem, but has migrated to a separate cryptographic network derived from BCH.
Following the fork, the new cryptocurrency was created – Bitcoin SV (BSV), and despite some initial battles the price of its coins managed to reach BCH. At some point, the bitcoin sv even exceeded BCH in the total market capitalization, although it quickly returned back below its older brother and more or less has faced a similar situation in the following days. At the time of writing, BSV had a price of $ 77 on Kraken, about $ 5.50 under BCH.
BCH & BSV are also plunge against Bitcoin (BTC)
However, the decline can not simply be attributed to the general decline in the market, as the combined value of BCH and BSV also plummeted against the bitcoin market (BTC). Before the fork, BCH was already trading close to an all-time low at around 0.08 BTC. Now, the bitcoin cash and bitcoin sv are worth a combined value of 0.048 BTC and this number does not show any sign of finding a fund at any time.
It is not clear what the future holds for bitcoin money, bitcoin sv and the cryptographic sector in general. However, at least at this time, it seems that operators are not sure that both BCH and BSV can prosper in the long term. Until the market fails to establish which of the two chains is true cheap heir of the BCH pre-fork, both could be destined to play smaller and smaller roles in the encrypted market.
Shutterstock foreground image. TradingView Charts.
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