Market Extra: Bitcoin, Ether drift lower; Bitcoin Cash jumps amid limited trade
An earlier version of this article incorrectly referred to Elizabeth Stark’s company affiliation. She is the CEO and co-founder of Lighting Labs. The Lighting Network is a blockchain protocol. The error has been corrected.
The main digital currencies were drifting lower on Wednesday, while a new version of the world’s biggest cybercurrency, known as Bitcoin Cash, was extending its rise since being split from the original less than 24 hours ago.
Bitcoin Cash pared an early advance and was trading at $ 469.24, up 75%, after peaking around $ 728, or up nearly 130%, earlier Wednesday, when its total market value hit about $ 11 billion. Still, Bitcoin Cash’s value is around $ 7.7 billion, placing it third among all prominent cryptocurrencies, behind Ethereum’s Ether token, with a value of $ 21 billion, but ahead of digital currency Ripple at $ 6.7 billion.
Market participants said a lack of wide acceptance by other players, notably exchanges, in the digital currency industry, was resulting in few, if any, trades in Bitcoin Cash. That early illiquidity had supported its earlier rise, but a lack of selling also means its downside is limited, according to Elizabeth Stark, CEO and co-founder of Lightning Labs, a blockchain-related platform.
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“Everyone can buy but no one can sell unless they were credited on an exchange,” Stark said, citing recent comments over Twitter from industry participants. She said currently few, if any, exchanges were taking deposits of Bitcoin Cash. One major bitcoin exchange, Coinbase, said that it wasn’t accepting Bitcoin Cash deposits.
I don’t know of any exchange that actually accepts BCH deposits yet.
— Peter Todd (@petertoddbtc) August 2, 2017
So-called Bitcoin Cash is the result of a cadre of bitcoin developers’ demand for a version of the popular cryptocurrency that allows virtual miners, which support the currency, to more rapidly process transactions in larger units known as blocks.
The fork, or creation of the new bitcoin software version, comes as the industry is wrestling with evolution and a competing existential question about how and in what ways cybercurrencies, like bitcoin BTCUSD, +4.63% will change.
Digital currencies, in fact, are garnering broader attention from staid players on Wall Street. Indeed, on Wednesday, U.S. exchange operator CBOE Holdings CBOE, -0.46% announced an agreement with twins Tyler and Cameron Winklevoss’s virtual-currency exchange Gemini Trust Co., which could pave the way for bitcoin derivatives. The twins have been big proponents of bitcoin and have tried to garner support from the Securities and Exchange Commission to launch an exchange-traded fund, underpinned by bitcoin, which was initially rejected but is still under consideration in some form, according to reports.
For its part, the currency didn’t get a bump from that news, with a single bitcoin off 0.5% at $ 2,721,37. Meanwhile, Ether was trading down 2.4% at $ 221.49.