After the massive price increases of the last days Bitcoin had to lose in the last day properly at market capitalization. The bitcoin price is currently trading at $ 16,800 - a drop of around 12%. Bitcoin market capitalization slid from its $ 176 billion peak on December 17 to $ 280 billion today. At the same time, the Bitcoin descendants, respectively Forkcoins, Bitcoin Cash (BCH) and Bitcoin Gold (BTG), gained massive value. What is behind these movements?
With regard to coinmarketcap it is noticeable that the Bitcoin Forkcoins are the biggest winners in the Top 10 of the last few day. Bitcoin Cash is in third place with a clear lead over Ripple, up over 50% - current price: $ 3,500. Considering that Bitcoin was quoted at the same level even in September of this year, this price increase is more than impressive. But bitcoin gold is also up 30% and $ 430 above the expectations of many investors.
The reasons for this market development or shift are manifold:
Expensive and lengthy transactions
As we've said so many times, the Bitcoin ecosystem is barely catching up with the massive increase in bitcoin demand. The result is high transaction fees and long transaction waiting times. Finally, Bitcoin can only execute a maximum of 7 transactions per second (theoretical value), so the mempool is overloaded as the transactions collect for verification. For a transaction to be processed quickly, enormous fees have to be paid by the user in addition. For example, with smaller amounts, the transaction fees may exceed the purchase amount. A situation that has a negative impact on the Bitcoin price, even if solutions (Lightning Network) are in sight. Bitcoin Cash and Bitcoin Gold are much better, at least for the moment, so they can benefit from scaling problems as bitcoin alternatives.
Bitcoin futures
Futures are so-called futures contracts with which you can bet on rising but also falling prices. This financial product class was recently launched on Bitcoin's largest derivatives exchange in Chicago. Accordingly, not only long positions but also short positions could be built up, which press on the Bitcoin price. An option that does not exist for other cryptocurrencies and scares some Bitcoin owners.
Mining Difficulty
The high mining difficulty of Bitcoin makes Bitcoin Cash and Bitcoin Gold in the ratio often more attractive. Finally, the crypto-currency is minted, which is the most economical or promises the highest return. As a result, Forkcoins can always reap the benefits of miners dodging them, as their mining difficulty relative to Bitcoin enables higher returns - thanks to Bitcoin Cash and Bitcoin Gold, to the detriment of Bitcoin.
Service provider acceptance and technical alternative
More and more merchants and wallet providers accept the Bitcoin Forkcoins, especially Bitcoin Cash. Bitpay, the world's largest Bitcoin payment provider, has announced that it will also accept Bitcoin Cash. The lower transaction costs, or lower scaling problems compared to the Bitcoin legacy, could fuel further adaptation by Bitcoin service providers. In addition, there are many supporters of the alternative approaches of Bitcoin Cash.
Uncertain market behavior and profit taking
In addition to the factual arguments presented above, there are always course impulses, which are based on the market behavior of the participants. It can be assumed that larger Bitcoin holders have sold parts of their Bitcoin positions. Whether these larger sales have now come from a pure profit-taking intent or by a clear negative attitude towards Bitcoin is difficult to understand. From experience, therefore, in the context of massive volatility, course corrections of minus 13% should not be overstated as with Bitcoin - as well as price increases of 50% as with Bitcoin Cash.
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