Though Trending Down, Bitcoin Cash Is Already Number 4 Among Cryptocurrencies

Bitcoin Cash, the Bitcoin offshoot that debuted Tuesday, already ranks as the fourth-largest cryptocurrency by market capitalization. But by Thursday morning its value had taken a beating over the previous 24 hours.

By mid-morning, Bitcoin Cash, which trades on digital-currency exchanges under the symbol BCH, was priced at just over $400 per coin, yielding a total market cap of more than $6.6 billion, according to Coinmarketcap.com, which ranks 100 cryptocurrencies. That’s just shy of third-place Ethereum’s $6.7 billion and triple the capitalization of fifth place Litecoin. Some 16.48 million coins were already circulating, just shy of the original Bitcoin’s 16.49 million (by design, Bitcoin’s coin supply is capped at 20 million).

But the price of Bitcoin Cash was down nearly 40%, dropping the digital currency from third into fourth place. By contrast, Bitcoin was trading in the mid-$2,700s, up 2% over the previous 24 hours. That defies expectations that Bitcoin’s price could collapse in the wake of the hard fork in its underlying code that created Bitcoin Cash on Tuesday.

Still, the value of both coins remains mostly locked up in their attraction as an investment vehicle. Merchant acceptance of Bitcoin is limited, and it is not known yet whether any locations have agreed to accept Bitcoin Cash. Most exchanges have so far avoided trading in Bitcoin Cash, notably San Francisco-based Coinbase, said to be the world’s largest cryptocurrency exchange.

Bitcoin Cash emerged as the result of a so-called hard fork in Bitcoin’s code that created an offshoot blockchain, or distributed ledger, to support the new coin. Bitcoin developers and miners, the entities that process Bitcoin transactions into the blocks that make up the digital currency’s blockchain, have wrestled for the past two years over issues stemming from Bitcoin’s limited capacity, a problem brought on by the cryptocurrency’s transaction growth. Capacity restraints have slowed transaction confirmations and driven up fees for users. Bitcoin Cash, by contrast, is supported by blocks with eight times the capacity of Bitcoin’s chain.

Another expansion initiative, which will double Bitcoin’s block size, is expected to go live later this month.