Bitcoin Cash (BCC) Price Volatility: From Peak to Valley, Exploring the Rational ReturnData from OKCoin, a major Chinese Bitcoin exchange, shows that Bitcoin reached a new high on August 6th, with a daily increase of nearly 10%, briefly exceeding the 22,000 yuan mark, hitting 22,550 yuan. Bitcoin is currently hovering around 21,500 yuan, experiencing a slight pullback
Bitcoin Cash (BCC) Price Volatility: From Peak to Valley, Exploring the Rational Return
Data from OKCoin, a major Chinese Bitcoin exchange, shows that Bitcoin reached a new high on August 6th, with a daily increase of nearly 10%, briefly exceeding the 22,000 yuan mark, hitting 22,550 yuan. Bitcoin is currently hovering around 21,500 yuan, experiencing a slight pullback. The rise in Bitcoin price was mainly attributed to the following four reasons:
- The New York Agreement (NYA) SW2X proposal was successfully activated, marking a victory in the first stage. The community thwarted the attempts by a few developers to promote the BIP148 Bitcoin split, bolstering community confidence in the NYA.
- Segwit, a new technology, was activated, which is considered good news based on the experience of Litecoin, whose price significantly increased after Segwit activation. This is likely to drive Bitcoin's price up.
- The emergence of Bitcoin Cash (BCC) did not significantly impact Bitcoin's price, eliminating community concerns about the 2MB hard fork scheduled for November.
- Trading platforms suspended Bitcoin deposits and withdrawals on August 1st, causing some panic in the market due to the impact of the Bitcoin Cash (BCC) hard fork. After reopening deposits and withdrawals, the panic subsided, leading to a price increase.
Since its launch on August 1st, Bitcoin Cash (BCC) has experienced a rollercoaster ride in price. Driven by the positive news of multiple domestic and international trading platforms supporting BCC, data from WeiBit shows that BCC surged to 4,500 yuan on August 2nd. Its market capitalization temporarily surpassed Ripple, peaking at $7 billion, ranking third on the cryptocurrency market cap ranking.
However, starting on August 3rd, the price began to plummet, reaching close to 1,300 yuan on August 6th. BCC's market cap has fallen from third to fourth, shrinking from $7 billion to around $3.5 billion. On August 7th, prices started to rebound, exhibiting signs of recovery.
The rise in BCC's price was partly driven by the limited selling pressure due to platform restrictions on deposits and withdrawals. Another factor was the high demand for Bitcoin Cash within the community, especially with the listing of BCC trading on numerous domestic and international cryptocurrency exchanges.
The decline in BCC's price can be attributed to several factors. One is the increased selling pressure after platforms reopened deposits and withdrawals as the network operated normally. Another reason is the opportunistic large-scale selling by BCC opponents, leading to market supply-demand imbalances. Moreover, the lack of market awareness and an immature ecosystem around BCC triggered panic selling.
Bitcoin Cash (BCC), upon its arrival, sparked controversy within the community. Some opposed it, while others supported it, although the majority held a positive attitude towards BCC, particularly among major Chinese exchanges. Some exchanges initially maintained a neutral stance but eventually shifted their support under community pressure. A prime example is Coinbase, one of the world's largest Bitcoin exchanges, which has begun to support BCC.
Bitcoin Cash (BCC) is the "egg-born sibling" of Bitcoin, a novel blockchain asset that alters Bitcoin's original technological intent. It employs dynamic difficulty adjustment and is considered by the community as a formidable competitor to Bitcoin. BCC is also a product of the Bitcoin scaling debate, with proponents of large blocks constituting its primary supporters and drivers.
The rational return of BCC's price will contribute to the construction of a mature and thriving ecosystem.
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