Bitcoin Potentially Risk 'Currency Trading Chaos'
Bitcoin Potentially Risk 'Currency Trading Chaos'
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LONDON - A split in the Bitcoin community is set to create a new incompatible version of the cryptocurrency on Tuesday. A group of insiders is unhappy with existing plans to speed up transaction times.
They plan to offer existing investors a matching amount of a new virtual asset - called Bitcoin Cash - which could put pressure on the value of original bitcoins.
One expert has warned there could be trading 'chaos' over the coming days. Several popular Bitcoin platforms are refusing to support the new coins.
That means investors who currently rely on some Bitcoin currency exchanges and virtual wallets will be unable to take advantage of the offer unless they switch to alternative providers. And moving from one platform to another carries risks of its own.
"Nobody can be sure how this is going to play out over the short term," commented Iqbal Gandham, UK managing director of the eToro trading platform.
Potential chaos
The uncertainty surrounding Bitcoin Cash's chances has led to one futures market in Bitcoin Cash to value one coin as being worth about $267, a fraction of the $2,780 each bitcoin was trading at short time ago.
In theory, if mass adoption were expected, the two currencies should be much closer in price.
"There's massive uncertainty and the quoted futures price should be taken with a grain of salt," commented Dr Garrick Hileman, research fellow at the Cambridge Centre for Alternative Finance.
"We won't know the real Bitcoin Cash price until a number of exchanges across the world start trading it, and it's still not clear when that will happen," he said.
And he added that there could be some wild swings in the value of both types of Bitcoin over the coming days.
"My sense is that the split can be managed if exchanges and wallets take the necessary precautions," he explained.
"But I suspect some will not be well prepared as this happened quickly and a lot of organisations are coming on board at the last minute. It wouldn't surprise me if there is some chaos," he added.
They plan to offer existing investors a matching amount of a new virtual asset - called Bitcoin Cash - which could put pressure on the value of original bitcoins.
One expert has warned there could be trading 'chaos' over the coming days. Several popular Bitcoin platforms are refusing to support the new coins.
That means investors who currently rely on some Bitcoin currency exchanges and virtual wallets will be unable to take advantage of the offer unless they switch to alternative providers. And moving from one platform to another carries risks of its own.
"Nobody can be sure how this is going to play out over the short term," commented Iqbal Gandham, UK managing director of the eToro trading platform.
Potential chaos
The uncertainty surrounding Bitcoin Cash's chances has led to one futures market in Bitcoin Cash to value one coin as being worth about $267, a fraction of the $2,780 each bitcoin was trading at short time ago.
In theory, if mass adoption were expected, the two currencies should be much closer in price.
"There's massive uncertainty and the quoted futures price should be taken with a grain of salt," commented Dr Garrick Hileman, research fellow at the Cambridge Centre for Alternative Finance.
"We won't know the real Bitcoin Cash price until a number of exchanges across the world start trading it, and it's still not clear when that will happen," he said.
And he added that there could be some wild swings in the value of both types of Bitcoin over the coming days.
"My sense is that the split can be managed if exchanges and wallets take the necessary precautions," he explained.
"But I suspect some will not be well prepared as this happened quickly and a lot of organisations are coming on board at the last minute. It wouldn't surprise me if there is some chaos," he added.
(rnz)
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