The opening of a new crypto exchange backed by Citadel Securities has unleashed a speculative mania in Bitcoin Cash, an offshoot of the original digital token, with interest especially high among traders in South Korea.
(Bloomberg) — The opening of a new crypto exchange backed by Citadel Securities has unleashed a speculative mania in Bitcoin Cash, an offshoot of the original digital token, with interest especially high among traders in South Korea.
Bitcoin Cash soared as much as 32% to $324 on Friday, taking gains in June to around 170%. The coin is among just four — including bellwethers Bitcoin and Ether — selected to trade on EDX Markets, the institutional-only platform that went live this month.
“EDX would have thought long and hard about what tokens are safe to trade and which tokens are likely to fall afoul of the SEC so just being traded on EDX is a sign to the market that it’s probably ok,” Kate Laurence, chief executive at crypto-focused venture capital firm Bloccelerate, said in an email. “The idea is: if Wall Street thinks it’s safe, so do I.” Ethereum rival Solana, whose native coin SOL also jumped as much as 8.6% on Friday, may be to some extent be experiencing a dead cat bounce, she said.
Binance, OKX, Upbit, and Coinbase have emerged as the predominant trading platforms for Bitcoin Cash, as shown in data provided by CCData. Of note is the significant increase in trading volume on South Korea’s Upbit. Starting June 21, the platform witnessed a surge in trading, with its share in global volume jumping to 17.2% from 1.3% at the onset of June.
Upbit’s volume increase indicates that “the recent price action was influenced by the Korean traders,” said Jacob Joseph, research analyst at CCData.
With Bitcoin outpacing most other cryptocurrencies this year and some smaller tokens weighed down by concerns that the US Securities and Exchange Commission will label them as securities, investors are piling into coins perceived to be under less regulatory threat. Similar to Bitcoin Cash, proof of work coins like ZCash and Dash are among other tokens posting large gains on Friday.
Litecoin — which is among the coins listed on EDX — also rallied. The jump could in part be driven by its upcoming halving event, expected for August 2, 2023. A halving – or halvening – cuts in half the amount of tokens that cryptocurrency miners receive as reward for their work. “Given that the halving event is just 5 weeks away, we might see a more substantial rally into the event,” Markus Thielen, head of research and strategy at Matrixport, said in a recent note.
Despite the rally in a few tokens, the broader altcoin market has still underperformed Bitcoin. An index comprising the bottom half of the top 100 tokens by market value is down 26% this quarter. The divergence between Bitcoin’s performance over the period and the latter gauge is the widest since the last three months of 2020.
Most altcoins are trading back near their 2022 lows, marking a critical support threshold for investors, Jamie Douglas Coutts, senior market structure analyst at Bloomberg Intelligence, wrote in a recent note. “For any individual altcoin, a break below their 2022 low would likely usher in a capitulation selling event,” Coutts wrote. “Such an event could provide a cycle-defining entry point for the assets where network adoption can continue to rise despite lousy price action.”
–With assistance from Muyao Shen.
(Updates to include trading volume data, beginning in the fourth paragraph.)
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