A historical event will be observed in the world of Bitcoin on August 1 when the currency will split into two coins, i.e., Bitcoin Core and Bitcoin Cash (BTC). The purpose of this move is to secure the brand of Bitcoin along with the BTC ticker.
This has led to the opening of the future market on ViaBTC. Currently, the trade value of bitcoin on that platform is $516. OKCoin will also list the currency in addition to other exchanges, but Coinbase, a bitcoin exchange, has clearly mentioned that they will not allow the withdrawal of Bitcoin Cash, which resulted in growing frustration and agitation among big as well as small blockers.
Hopefully, this restlessness will bring about a positive change and give rise to a cordial relationship between the two sides as they begin to move in their own directions and work on their own projects to achieve their individual visions. However, the question remains, i.e., what will be the impact of one coin’s price action on the other?
Effect of One Coin’s Price Action on the Other – Split of ETC and ETH
The impact of one coin’s price action on the other can be estimated through a split of ETC and ETH that occurred in 2016. In combination, the value of both the currencies increased right after the fork. The value of the Ethereum rose even higher to a new level, whereas, ETC has also achieved the same level as experienced by ETH back then.
It is to be noted, however, that the relationship between the two currencies was inversely correlated at the time of ETC’s initial listing. If the value of ETH declined, the ETC’s value used to move up and vice versa. This also caused confusion in the market, which was left to figure out which currency was stronger. They eventually settled with two currencies going in their own direction. Another possible reason of the settlement was that ETH holders gained the same share of both currencies; most probably by selling one currency and purchasing the other on the basis of making judgement about their values.
Will the Coin-Split Follow the Same Trend as the Split of ETC and ETH?
It is possible that Bitcoin will experience the same as happened in the split of ETC and ETH. But there are a number of differences.
Support by Community and Developers – ETH had 80 to 90 percent support of the community and developers along with the backing of ETH projects. In Bitcoin, however, 80 percent backing is by big blocks, whereas, impartial voting of known token holders has not yet taken place. Moreover, developers are more divided than they were in ETH.
Controversy in the Market – Secondly, ETH and ETC was less as well as more controversial. United community was the reason for less controversy, which was considered as a breach of principle by some; hence, the high controversy. In Bitcoin, however, the reason behind the controversial nature of the split is different. Instead of the agreement on the principle by both sides, the debate is more about how to go about achieving those principles with clear differences of opinion in the past.
The certainty of the Split – No one had imagined that ETC would be a thing until Poloniex listed it, which also brought some chaos. Whereas, in case of Bitcoin, it is certain that the split will happen as it is supported by both miners and the market. But due to the media news of it being averted, it will come as a surprise to some.
Effect of the Split on Ethereum
The effect is difficult to measure, because ETH has its own ecosystem and different potential via smart contracts. However, it caught the attention of big blockers after the stalemate who may be inclined toward BCC; hence, holding both the coins.Furthermore, uncertainty in Bitcoin might encourage investors to invest their money in Ethereum.
It is not sure what exactly will happen, but one thing is certain; it is going to be an unforgettable event in the world of digital currency, showing its power and decentralized nature.