CoinBase, the world’s biggest Bitcoin Exchange surprised traders by launching support for Bitcoin Cash out of the blue. Bitcoin Cash forked from Bitcoin Core back in August since it did not receive majority support. But it did receive enough support for it to stay around. The major difference between Bitcoin core and bitcoin cash is the block size. Block size of Bitcoin core is 1MB and the block size of Bitcoin Cash is 8MB.
The difference in the block size has been a huge deal, especially now. With the increasing popularity of Bitcoin Core, the network has not been able to keep up with the demand. Transaction cost for instant confirmation is as high as $30 on Bitcoin, while it is just around $1 on Bitcoin Cash. The transaction costs in Bitcoin Core is exceptionally high when you’re sending small amounts.
Coinbase announced the inclusion of Bitcoin Cash in a Blog Post which said “We have been monitoring the Bitcoin Cash network over the last few months and have decided to enable full support including the ability to buy, sell, send and receive. Factors we considered include developer and community support, security, stability, market price and trading volume.”
The community has been getting impatient with the progress with Bitcoin Core. In fact just yesterday, Emil Oldenburg, CTO and Co-Founder of Bitcoin.com said in an interview that he converted all of his Bitcoin to Bitcoin Cash. Apparently, it took him as about $50 in fees and 12 hours to complete the conversion. Bitcoin has not been ideal for transactions lately.
Initially, CoinBase said that they wouldn’t support Bitcoin Cash. But they reversed their stance out on August 3rd and said users would be able to withdraw it by January 1. They were not clear on adding support for Bitcoin back then. The current update was unexpected and came out of the blue. Bitcoin Cash started surging an hour before CoinBase made the announcement, giving rise to accusations of insider trading. But CEO of CoinBase clarified in a blog post that they have a strict policy against insider trading and had reminded employees multiple times.
Now that CoinBase has entered the market, we should see more volatility. CoinBase has also released the Bitcoin Cash which split during the fork to their customers. There was a surge in Bitcoin Cash since a large part of the community was discontent with the transaction fee on Bitcoin Core last week. But the news from CoinBase has sent Bitcoin Cash soaring to new high and touched $4,000 today morning. Most of the money came in from Bitcoin, which dropped nearly 14% in the last 24 hours.
At this point, price movement for Bitcoin Cash is not clear. If you were holding Bitcoin Cash, now is a good time to sell a portion of it and set a strict stop-loss around $3,000 for the remaining.