The entire Bitcoin Cash situation has created some very interesting discussions over the past few weeks. Whether or not BCH tokens have significant value remains to be seen for now. If the IOU and futures markets are any indication, however, we could be in for a very wild ride over the next few days. It is notable that Bitcoin Cash futures are trading at almost twice the value of the BCH IOUs right now.
Bitcoin Cash Futures vs BCH IOUs
Considering how Bitcoin Cash tokens do not even exist yet, the market interest is quite surprising. Ever since ViaBTC announced they would be trading BCH tokens against both the Chinese Yuan and Bitcoin, people have been trying to influence the price of the nascent altcoin. Although the platform’s trading volume has been a bit hit-or-miss, the price is seemingly holding its own around the 0.125 BTC mark.
To put that into easier numbers, it means one Bitcoin Cash will be worth roughly one-eighth of a Bitcoin at current prices. That puts the value of non-existent BCH tokens at around US$340, which is not half bad. Granted, Bitcoin Cash was trading at nearly US$900 less than a week ago, and the ongoing price declines are not too positive when looking at the bigger picture. However, the market has overcome a low of 0.079 BTC per Bitcoin Cash, which was hit less than 48 hours ago. This goes to show that in BCH we see quite a bit of volatility, but indeed that is nothing new in cryptocurrency.
It is rather strange to see Bitcoin Cash futures trading at around US$750 right now. These futures contracts are associated with a currency that, again, doesn’t actually exist right now. However, this price on HitBTC shows there is some potential bullish momentum for Bitcoin Cash on the horizon. If these futures’ prices are something to take into account, the value of every individual BCH token could more than double in price over the next few days. Considering the tokens will be issued at a 1:1 ratio to Bitcoin holders, that is a lot of money being brought into circulation right away.
There will soon be as many BCH tokens in circulation as there are bitcoins right now. Both currencies will have similar supply caps as well, with no more than 21 million tokens to be issued in the long run. The way things are looking right now, there may be a large number of people looking to dump their Bitcoin Cash tokens during the first few hours after the fork. At the same time, this would create plenty of buying opportunity for everyone who firmly believes their BCH tokens will indeed become worth a lot of money.
The big question is whether or not Bitcoin and Bitcoin Cash will ever compete with one another. In a way, they will be in the same position as Ethereum and Ethereum Classic. BCH tokens are created due to an ideological difference regarding the future of the project. Bitcoin will integrate Segregated Witness to ensure cheaper transactions and an increase in the transaction throughput. Bitcoin Cash, meanwhile, is looking for direct block size increases with plans to go as high as 8 MB per block in the next few years. It is possible that network could see blocks sized at 32MB at some point as well, depending on how things evolve.
With the Bitcoin Cash futures and IOU prices so far apart, interesting things are bound to happen today. Most people know the fork will occur today and will spawn the Bitcoin Cash tokens for which people have been waiting. It will be an interesting day for Bitcoin, although the dust will only settle after a few days or weeks from now. We look forward to seeing how things play out.