Tuur Demeester, prominent bitcoin analyst too investor, lately stated that the adjacent Bitcoin Cash (BCH) sell-off volition probable Pb to an increment inward necessitate toward Litecoin. He emphasized that over the yesteryear 2 years, Litecoin (LTC) has evolved into a existent bitcoin hedge due to its activation of the Bitcoin Core evolution team’s transaction malleability make too scaling solution Segregated Witness (SegWit).
“If BCH heart fails, money could gyre into LTC, it existence a existent Bitcoin (BTC) hedge. I exactly invested some BCH profits into LTC. With “real Bitcoin hedge” I hateful [that] Litecoin has SegWit too it volition probable merge other cutting border tech ahead of BTC,” Demeester explained. Since the completion of the August 1 difficult fork execution, BCH has struggled to demonstrate an increment inward value too necessitate from investors. For weeks, it remained behind Ripple inward damage of marketplace position cap too trading volume. However, equally the daily trading book of BCH drastically increased inward Bithumb, the world’s largest cryptocurrency commutation based inward South Korea, the value of BCH surged. In a catamenia of 3 days, the toll of BCH rose from $300 to $996, coming unopen to breaching the $1,000 mark.
On August 19, when BCH reached its all-time high toll of $996 too a marketplace position cap of $16.4 billion, Demeester noted that a sell-off is imminent, to a greater extent than oft than non due to the sudden increment inward the value of BCH. More importantly, because the trading book of BCH is heavily concentrated inward 1 marketplace position that is South Korea, amongst Bithumb too Korbit processing fifty per centum of global trades, Demeester explained that the BCH commutation marketplace position was non at all stable.
As Demeester predicted, the marketplace position cap of BCH decreased substantially from August nineteen to 21, dropping yesteryear over $7 billion inside a mere two-day span. BCH has recovered slightly since dipping below the $10 billion percentage too has since stabilized at $10.5 billion.
Why is it Likely That BCH Volumes Could Flow to Litecoin?
Due to its similarities to bitcoin inward damage of structure, monetary policy too philosophy, Litecoin has been considered equally a hedge investment tool against bitcoin’s volatility for awhile. Although the entire cryptocurrency marketplace position does fluctuate to a greater extent than or less bitcoin inward almost circumstances, Litecoin is 1 of the few cryptocurrencies that rest relatively stable amidst marketplace position volatility.
But, it is also of import to annotation that the marketplace position for Litecoin is rattling similar to BCH. Like Bitcoin Cash, Litecoin’s trading book is heavily centralized inward Asia, particularly inward China. While the vast bulk of BCH trading is facilitated through South Korea’s 2 largest bitcoin exchanges, a pregnant component of its trading book originates from China, only because all of the Chinese bitcoin commutation market’s largest exchanges yesteryear book convey been supporting BCH trading.
Hence, if the marketplace position too investors experience less confident inward the mightiness of BCH to rally yesteryear its early on stages too increment inward value over time, at that topographic point exists a high probability that traders would only switch over to Litecoin equally hedge against bitcoin too BCH. In South Korea, it is also probable that investors would sell their BCH too motility to Ethereum, equally it also is the largest commutation marketplace position for Ether (ETH).
BCH has been incredibly volatile inward damage of marketplace position cap too toll due to tilt surrounding ViaBTC, Bitmain too the recent difficult fork proclamation of the SegWit2x consortium of companies too miners.