Bitcoin was worth less than $590 a year ago. Then early Tuesday, the cryptocurrency surged to yet another all-time high above $3,500, as investors likely pulled their funds from the new Bitcoin spinoff, Bitcoin Cash or “Bcash,” to invest it in Bitcoin.
Bitcoin pulled back slightly by mid-day, trading at $3,430.
That came after the two split Aug. 1, with Bitcoin holders receiving an amount of Bcash equivalent to their number of bitcoin tokens. That appeared to create billions of dollars overnight. But investors, rather than trading their bitcoin in for Bcash, appeared to trade their Bcash in for bitcoin.
“After the split, investors holding Bitcoin were also given Bitcoin Cash. Initially the market cap of Bitcoin Cash rose to $12 billion, but we’ve since seen a lot of people selling their Bitcoin Cash in order to buy more Bitcoin,” said Matthew Newton, a market analyst at online trading platform eToro in an emailed statement. “In recent days we’ve seen $8 billion wiped off the market cap of Bitcoin Cash, and $9 billion added to the market cap of Bitcoin.”
Bitcoin has surged about 19% since Aug. 1.
Bcash, which is now worth about $376, formed amid a debate among Bitcoin miners over how to make Bitcoin transactions faster and potentially cheaper. That resulted in the Bitcoin community approving SedWit2x, a software upgrade that would scale up the cryptocurrency. But a small faction was dissatisfied with the upgrade, saying it didn’t go far enough. As a result, they formed Bcash.