The Coinbase Bitcoin Cash Affair
The cryptocurrency market is a young one and, as such, it’s in a constant state of flux as it tries to find its place in the world. Much like other industries in their infancy, there’s a whole lot to sort out before the cryptocurrencies develop a solid routine and standing. One of the newest developments in the market is the arrival of Bitcoin Cash (BCH) and the resulting Coinbase BCH fallout.
The possibility of a Coinbase lawsuit, the Coinbase Bitcoin Cash relationship, and just how other coin exchanges would handle these unforeseen developments all speak to the unpredictable nature of cryptocurrencies.
Let’s provide some context here for the Coinbase BCH story. Bitcoin Cash is the result of a hard fork split between two factions within Bitcoin (BTC). One faction wanted to change certain aspects of the mining process and affect a few other changes overall to BTC, which ultimately led to the schism. That minority of developers saw that BTC was not taking their pleas to heart and formed the splinter BCH.
Where Coinbase—one of the largest coin exchanges in the world—comes into this is that it said that it would not support BCH on its platform. This resulted in many owners getting riled up, because BCH is basically free money for anyone who owned BTC before the split.
You see, the owners of Bitcoin also received a bunch of BCH coins after the split, which amounts to free money. But since Coinbase wasn’t allowing BCH on their exchange, people were understandably miffed and threatened to take the coin exchange to court.
Coinbase responded by sticking to its guns that BCH was unproven and unsafe, but eventually relented and now says that it will support Bitcoin Cash come January 1, 2018. Coinbase was hardly the only one to question the legitimacy and safety of BCH, but by nature of its size and reported $1.0-billion valuation, it’s important for BCH to get on the exchange at some point. (Source: “Coinbase says it will support Bitcoin Cash after all — but it isn’t committed to trading yet,” TechCrunch, August 3, 2017.)
The Coinbase lawsuit was being bandied about for a while as a possibility, and may still potentially go through as there’s no word yet on how Coinbase’s acceptance of BCH will affect the possible legal proceedings.
To make things even more complicated in this saga, Coinbase still hasn’t confirmed whether it will support trading of BCH, meaning that owners will only have the ability to withdraw Bitcoin Cash come 2018, but not use the exchange to swap coins.
This brings us up to date on the latest Coinbase news. While the Coinbase lawsuit is still very much in play as a possibility, we don’t know how it will all shake out yet.
The Coinbase status as one of the premier exchanges is obviously important to the Bitcoin Cash price, so BCH supporters should hope that the situation is resolved sooner rather than later.
Bitcoin Cash Price
Data courtesy of CoinMarketCap
Between the Coinbase lawsuit and the Coinbase Bitcoin Cash relationship, where does that leave us with the Bitcoin Cash price?
Well, as important as Coinbase BCH is to the future of the cryptocurrency, right now the moves aren’t likely to have much sway as the coin is currently one of the newest entries on a frothy market known for wild swings both up and down.
Bitcoin Cash over the past week along has gone from $300.00 to $400.00, back down to $200.00, and then up to around $700.00 before falling back to $330.00 or so. This is not the sign of a stable investment. This is a speculative environment that investors should play with at their own risk.
Coinbase charts, news, and all other manner of outside influences can’t really save BCH from what it is right now: gambling. If you’re looking to make a quick buck and think you have a strong handle on the market—which is saying a lot due to the volume and hype surrounding cryptocurrencies—then by all means, try your hand at BCH.
But I don’t think that’s the best idea for the majority of investors. Consider that BTC recently overtook the $3,000 mark in convincing fashion and has a far more stable future ahead of it relatively compared to the chaos of BCH.
That’s not to say you can’t make money in chaos, but it’s also easy to lose it as well. My advice: Investors might be better off sticking to BTC and other known quantities like Ethereum (ETH), letting the dust settle some before they decide to invest in BCH.