Popular Bitcoin cash has taken a hit with reports of low commercial use as well as an 85% drop in market capitalization down from the tokens all-time high. This news comes as a shock and a mood damper since everyone was expecting a sustained rally going into September. This is supposed to be a happy time for the crypto token which just marked the first anniversary of its unveiling early this month but as things stand a lot of the champagne will have to be put on ice now. Just a year since Bitcoin cash was birthed out of the Bitcoin core Blockchain, advocates of the token such as early adopter Roger Ver, have been on a serious campaign talking it up and terming it as the new Bitcoin.
While talking to CNBC on phone, Ver claimed that Bitcoin cash is given its underlying value by the fact that you can use it in commerce to pay for things. According to Ver, Bitcoin cash is unlike all the tokens out there that turn into speculative without any actual utility. His claims, however, do not seem to hold water in the current market. While on Bloomberg, senior economist at chainanalysis, Kim Grauer, gave her opinion on Bitcoin cash by first analyzing its first year in the market. She recounted Ver’s claim that Bitcoin cash had an edge over other crypto tokens since it was actually highly used while paying for things.
She sort to debunk this by observing 17 of the payments received by the most traded exchanges in the market. She noted that payments made using Bitcoin cash had slumped from highs of 10.5 million dollars in March this year to 3.7 million dollars in May of this year. This statistic right there dispelled Ver’s claim. In comparison, Bitcoin reached of 60 million in transactions in May down from 412 million in September last year. According to the economist Bitcoin cash’s low adoption could be the product of a majority BCH ownership by a small concentration of off-exchange addresses.
A shocking statistic shows that about 56% of Bitcoin cash holdings are in possessed by about 67 wallets that are not listed on exchanges. These wallets hold between 10,000 to 100,000 of these tokens, which shows that most of the Bitcoin cash traffic is driven by a tiny clique of wealthy merchants. Bitcoin cash fortunes in the market have also been deemed, owing to a sharp decline with the correction that happened late last year. In comparison, Bitcoin has remained resilient bouncing back from lows of 32 percent to a high of 53 percent at the time of writing. The gloom does not end there since BCH has also taken an 86 percent dip in market capitalization.
