The upcoming second fork of Bitcoin Cash (BCH) has sparked intense market discussions since its 2018 hard fork. Scheduled for November 15, 2020, this event raises questions about BCH's future trajectory.
Key Takeaways:
- Community Dispute: The fork stems from algorithmic disagreements, reflecting underlying power struggles.
- Price Volatility: Post-fork "candy distribution" may create short-term futures premiums, followed by potential price corrections.
- BTC Dependence: BCH's price remains closely tied to Bitcoin's market movements.
- Liquidity Shifts: New tokens could trigger initial price surges before downturns, increasing short-term trading activity.
- Exchange Challenges: Platforms face operational complexities during forks.
Understanding BCH’s Fork History
BCH originated from Bitcoin's 2017 hard fork due to disagreements with Bitcoin Core’s development constraints. Its 2018 fork split the network into BCH ABC and BCH SV, led by controversial figure "Craig Wright" (aka "Faketoshi").
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Current Fork Dynamics:
The 2020 conflict involves Bitcoin ABC (demanding 8% miner revenue) versus BCHN supporters. This highlights centralization risks and miner revenue disputes.
Post-Fork Economics
1. Coin-Hoarding Effects
- Fork-triggered "candy" distributions may inflate BCH futures premiums.
- Negative premiums observed since mid-October could worsen pre-fork.
- BTC’s bullish trends may overshadow BCH’s standalone performance.
2. Hashpower and Price Dilution
- Miner migration to BTC/BSV post-BCH halving weakens network security.
- Data: Bitinfo Charts show post-halving hashpower fluctuations, signaling volatility.
- Investor skepticism grows over endless forks eroding BCH’s value.
Risks and Market Reactions
Liquidity Uncertainties
- New tokens may boost transient liquidity before potential exchange delistings.
- Exchanges must navigate split-chain asset management (e.g., BCH vs. BCHA naming rights).
Community Divide
- Pro-IFP (Coinbase revenue share) vs. Anti-IFP camps risk prolonged chain splits.
- Figures like Litecoin Pool’s Jiang Zhuo'er endorse forks for market attention, while others warn of instability.
FAQ
Q1: What triggers BCH forks?
A: Clashes over protocol changes (e.g., algorithms, revenue shares) fracture consensus.
Q2: How does fork "candy" affect prices?
A: Temporary demand spikes often precede corrections as markets normalize.
Q3: Could BCH forks continue indefinitely?
A: Yes, unless governance resolves core disputes over miner-dev team incentives.
Final Thought: While forks may inject short-term optimism, BCH’s long-term viability hinges on balancing innovation with community trust. Stay updated with expert insights 👉 here.