For a long time, people debated whether Ethereum would one day overtake Bitcoin and become the largest cryptocurrency by market capitalization. The tables have turned on Ethereum now, with Bitcoin Cash overtaking Ethereum to become the #2 cryptocurrency.
Phenomenal run results in flippening
Bitcoin Cash had a phenomenal run during the weekend, with its price increasing from $660 on Friday to a peak of $2,446 on Sunday. The price has almost quadrupled in a matter of two days. While the price seems to have been driven by Korean exchanges, other global exchanges have reported healthy gains too.
At the time of reporting the price had corrected, but still bore a healthy gain. The overall market capitalization of Bitcoin Cash after the correction is still ~$31 bln, which is more than the market capitalization of Ethereum. While people had always thought of Ethereum as the major challenger to Bitcoin, it now appears that Bitcoin Cash has taken Ethereum’s place.
Vitalik Buterin tweeted his congratulations
Congrats on this. Seriously. @rogerkver @JihanWu @deadalnix pic.twitter.com/UXYdEcRn4y
— Vitalik Buterin (@VitalikButerin) November 12, 2017
The sharp rise in Bitcoin Cash’s price has come at the expense of Bitcoin. Bitcoin’s price has been on a steady downtrend ever since the Segwit2X fork was cancelled. A lot of people had bought Bitcoins in the expectation that they would get free Segwit2x coins after the fork. While market observers had expected some of this hot money to flow into altcoins once the Segwit2X fork happened/got cancelled, Bitcoin Cash seems to have been the main, but not only, beneficiary. The combined price of Bitcoin and Bitcoin Cash is over $8,000, which is not very different from the price on Friday.
Unconfirmed transactions plague Bitcoin
Apart from the dashed expectation of free Segwit2X coins, another problem plaguing Bitcoin is the huge transaction backlog. With over 135,000 unconfirmed transactions and transaction fees soaring, the Bitcoin network seems to be grinding to a halt. Segwit2X would have made a difference, but it has been abandoned. Other scalability solutions, whether the Lightning Network or others are urgently needed, but may not get implemented in the near future. In the face of these problems, Bitcoin Cash seems very attractive.
People have all along been looking for a Bitcoin-killer altcoin, an altcoin with enhanced features, whose value would increase to overtake Bitcoin. In the end the solution might have been staring everybody in the face – the market may place a premium on quick confirmation and low fees, which could boost Bitcoin Cash.