Market News
Bitcoin Hard Forks BCH, BSV, and BTG Continue to Rally Amidst Market Consolidation
This week, the crypto market is in a mix of red and green as Bitcoin sustains above $30,000 still. The largest cryptocurrency has been trading at $30,580 at the time of writing, while the trading volume sees a 3.7% drop from a day ago to $13.45 billion.
For now, the key challenge for Bitcoin is to maintain its position above the key psychological level of $30,000. On the downside, BTC has support available at $29,500.
With Bitcoin’s market dominance above 50%, it is likely that BTC will continue to consolidate around this level for now, but if it breaks the $32,400 resistance, a rally could see it hitting the $35,000 level.
ETH, meanwhile, is trading at around $1,880. The total crypto market cap is currently at $1.227 trillion as the likes of Near protocol, Stacks, Kaspa, Kava, BitDAO, Algorand, ApeCoin, and Bitget lost 3% to 7% of their value in the past 24 hours.
The latest lull in the crypto market comes after ten days of positive price action. During this time, Bitcoin soared to its one-year high but has now entered the consolidation phase. As BTC takes a breather, many altcoins are taking this as an opportunity to pump.
However, Bitcoin remains the main focal point of the crypto market action thanks to the world’s largest asset manager, BlackRock (BLK), filing for a spot Bitcoin ETF. Though the US Securities and Exchange Commission (SEC) has repeatedly refused to accept such funds, BlackRock can finally make this happen.
Moreover, a slew of other ETF sponsors, including Invesco, WisdomTree, and Valkyrie Investments, have filed for their own spot Bitcoin funds.
While Bitcoin ETF approval will take time given the SEC’s “very strong anti-crypto stance,” Katie Talati, head of research for crypto asset management firm Arca said in an interview that “there could be some more pressure on regulators to approve this vehicle, just because BlackRock is sponsoring it. We’re also seeing other asset managers for the traditional world filing their own ETFs, which is promising down the road in terms of having access to the asset class.”
Circle’s co-founder and CEO, Jeremy Allaire, expects this new wave of Bitcoin ETFs to be approved as “past concerns” of regulators are being addressed through the creation of a market surveillance mechanism.
This improved outlook comes after the early-June crackdowns on crypto trading giants Binance and Coinbase. The SEC sued both for acting as unlicensed exchanges and listing cryptocurrencies that it considers unregistered securities.
Bitcoin Following a Pattern
According to Markus Thielen, head of research for crypto service provider Matrixport, July has been a historically strong month for the crypto asset, with returns of 24%, 20%, and 27% in the past three years.
“Therefore, the probability that Bitcoin will be 10-20% higher during the next 30 days is high,” wrote Thielen, adding that BTC can rise to as much as $36k by August.
He further noted that the cryptocurrency had followed a pattern this year where its price increased about $10,000 before falling $5,000. He pointed out how the tumult caused by the U.S. banking crisis in March saw BTC sink to $20k before reaching as high as $25k, and then after this month’s SEC lawsuits, it dropped to $25k from $30k.
“Now we appear on the way to $35,000 as the expectations for the Bitcoin ETFs approval will bring more U.S. institutions and U.S. retail into this space,” he said. Matrixport had predicted earlier this year that BTC would reach $45k by years-end.
According to Thielen, BTC’s strongest rallies have occurred during U.S. trading hours, “a sign that U.S. institutions are buying Bitcoin while other regions are less active. “Claiming that ‘Crypto is dead in the U.S.’ appears to be a misconception,” he wrote.
While the US is cracking down on crypto, another bank HSBC Hong Kong will now allow its customers to trade Bitcoin and Ethereum futures ETFs. HSBC is the largest bank and the first lender in Hong Kong to allow its customers access to digital asset ETFs.
On Monday, the ETFs; CSOP Bitcoin Futures ETF, CSOP Ethereum Futures ETF, and Samsung Bitcoin Futures Active ETF have listed on HSBC Hong Kong’s “Easy Invest” mobile app. The simplicity and convenience of ETFs make them an attractive option for retail traders compared to other derivatives, such as options.
Besides all this, there has also been the emergence of China back into the cryptocurrency space.
China's relationship with cryptocurrency has been complex. This began in 2013 when China started imposing restrictions on cryptocurrency transactions. The nation's stance hardened further in 2017 when it took aim at Initial Coin Offerings (ICOs), which are used to raise funds for new cryptocurrency ventures.
This escalating pattern continued, culminating in 2021 when China outright banned cryptocurrency mining. But recently, Beijing published a whitepaper titled “Web3 Innovation and Development White Paper (2023)” that promoted Web3 technology as a crucial element of the internet’s future development.
Bitcoin Hard Forks Enjoying Continued Uptrend
Bitcoin is not the only one that is capturing all the attention, though its hard forks have also managed to gain traction, so much so that they have managed to rally even harder.
Compared to BTC’s 14.2% 7-day gains, BCH is up by 106.4%, BSV by 48.3%, and BTG has jumped 20.7%. Meanwhile, in 2023 so far, BTC’s price performance has been +82.23%, BCH’s +126.15%, and BTG’s +13.53%, while BSV fell 11.63% during this period.
BCH is the clear winner among Bitcoin hard forks. The $4.25 billion market cap cryptocurrency is up more than 16% in the past 24 hours to now trade at $225. BCH is also up 12.6% against BTC.
In contrast, BSV is a $706 million market cap coin trading at $37.8, following a 3.6% rise in its value against USD and no change against BTC. BTG is a $241.68 million market cap coin trading at $14.15, up 6% against USD and 4% against BTC.
When it comes to the trading volume of BCH, it recorded a 21.7% increase from a day ago to a record $987.6 million. Just four days ago, on Friday, BCH was managing $294.7 million in trading volume. This 235% jump in its volume suggests a significant increase in its market activity.
BCH derivative contracts also registered a 47.77% increase in its open interest (OI) at $400.86 million, last seen in Sept. 2021, as per Coinglass. This could be in anticipation of a significant flow of institutional capital into the crypto asset.
BSV, on the other hand, saw a 69.70% decrease in its volume to $31 million from a day ago, while BTG’s increased by an impressive 81% at $15.5 million.
While all three Bitcoin hard forks are enjoying renewed interest, their value is nowhere near their peaks. The crypto king Bitcoin is down 56% from its all-time high (ATH) of $69,00 that it hit in Nov. 2021.
Meanwhile, BCH, BSV, and BTG are down 94.2%, 92.5%, and 96.98% from their respective peaks. Interestingly, out of these three, only BSV made a new high in 2021, while BCH and BTG hit their ATHs in 2017, but then BSV didn’t even exist until late 2018.
These hard forks are rallying despite the ongoing consolidation in the market. BCH surged to a new one-year high, particularly due to being listed on EDX Markets alongside Bitcoin, Ethereum, and Litecoin.
The non-custodial crypto exchange EDX Markets has the backing of traditional finance heavy-weights Charles Schwab, Citadel Securities, and Fidelity Digital Assets. This is serving as a vote of confidence in Bitcoin Cash that it may be considered a commodity rather than a security amidst the increased scrutiny of the SEC over blockchain projects.
According to crypto research firm Santiment, the launch of EDX Markets helped BCH’s trading volume rise and, in turn, social media interest in the altcoin, which together is helping its price to rally. The sudden price move and social discussion about the token then attracted retail trader attention.
Click here to learn all about investing in Bitcoin Cash (BCH).
What’s Ahead for Bitcoin Hard Forks?
BCH is the native crypto of the Bitcoin Cash network, which was forked from the original Bitcoin blockchain in August 2017.
The chain split happened due to disagreements within the Bitcoin community over transaction capacity and scalability. Amaury Séchet, along with Roger Ver, Craig Wright, Bitmain, and others, left the Bitcoin network and created Bitcoin Cash.
Aiming to serve as a payment network, the blockchain’s activity is dwarfed by Bitcoin’s transaction numbers and has been facing significant challenges in achieving widespread adoption.
In 2018, Bitcoin Cash went through a further split, which resulted in the creation of Bitcoin SV (Satoshi’s Vision), led by early Bitcoin Cash proponents self-proclaimed Bitcoin creator Craig Wright and Calvin Ayre, founder of CoinGeek.
As tension rose amongst the developers of Bitcoin Cash over whether the protocol should have larger block sizes as well as smart contracts capability, those in favor to “restore the original Satoshi protocol, keep it stable and enable it to massively scale” went with BSV.
As for Bitcoin Gold (BTG), it was created in Oct. 2017 with the intention of reforming the mining process. The Bitcoin Gold blockchain split from Bitcoin because the community behind the project wanted to reduce the role of large miners by switching out Bitcoin’s mining algorithm, SHA-256, with EquiHash and to give smaller operations a chance to participate.
Over the years, the Bitcoin Gold blockchain has been hit with 51 percent attacks, first in May 2018 and then in 2020, where the attacker made off with $87,000 worth of BTG.
When it comes to price, all three of Bitcoin’s hard forks have been struggling to sustain any market movement and price action, only managing to pump during the market-wide bullish momentum. Even then, BCH, BSV, and BTG haven’t managed to see the kinds of returns other altcoins in the market have been experiencing.
In fact, BCH was only up 184.54% from its all-time low (ATL) of almost $77 in Dec. 2018. BSV’s ATL came just this month at $21.43 on June 10, and since then, it has only noted a +71% price performance. As for BTG, its price managed to rise 224% from its $4.25 low in Mar. 2020.
The latest price action is mainly driven by Bitcoin’s strength and being the center of attention. Retail may also have mistakenly, as the hard forks carry Bitcoin in their names or intentionally, due to their low price, turned to Bitcoin Cash, Bitcoin SV, and Bitcoin Gold.
So, while these hard forks of Bitcoin have been gaining the spotlight in recent times, their level of adoption and market activity is nowhere near the largest cryptocurrency, which continues to dominate. In the near term, BCH, BSV, and BTG may see more uptrend, but in the medium to longer term, these coins may not see much improvement in their value, network activity, or adoption.
