- On Tuesday, bitcoin split in two, doubling the holdings of some investors. With bitcoin cash trading around $400, those investors got a big payday. Not everyone is benefitting because not every exchange backed the new cryptocurrency.
The bitcoin split doubled the holdings of some investors, and today they appear to be reaping the benefits of the much anticipated fork.
To recap, on Tuesday, bitcoin split in two following a years-long battle in the community over the rules that should guide the cryptocurrency’s network.
That split resulted in the creation of a new currency, bitcoin cash, which has the same basic underpinnings, but plays by different rules. In essence, it’s almost like bitcoin cash is a copy of bitcoin, but running on a faster network.
There are numerous exchanges and wallets in which bitcoin investors can hold their money.
Investors who were holding their bitcoin on an exchange that backed bitcoin cash before the split, or in a wallet, saw their holdings double. But that wasn’t the case for everyone. Some big name exchanges, such as Coinbase, which serves nearly 9 million customers across 32 countries, refused to back bitcoin cash. As such, investors using Coinbase, for example, saw no change to the quantity of their holdings.
“In the event of two separate blockchains after August 1, 2017 we will only support one version,” David Farmer, the director of Biz Ops at Coinbase, a cryptocurrency exchange, wrote in a blog post. “We have no plans to support the bitcoin cash fork.”
Aaron Lasher, CMO of Breadwallet, told Business Insider that larger exchanges didn’t back the coin because it’s a hassle.
“You have to consider the cost of updating your coding and security capabilities,” he said. “Also, they probably didn’t think it was going to take off.”
But it is taking off. Bitcoin cash, by market cap, is already the third largest cryptocurrency, and it is now trading around $403 a coin.
In other words, a person with one bitcoin on an exchange like Coinbase, for instance, is missing out on $403 of essentially free money.
Bitcoin is down only 3% today, whereas bitcoin cash is up 66%.