Bitcoin Cash Soars When Added to Coinbase but Insider Trading Suspected
Bitcoin Cash has gone up more than 50% in the last 24 hours and is now trading above $3,000. Much of its gains appear to be at the expense of Bitcoin, which fell 15% over the same period.
In a surprise move crypto exchange Coinbase added Bitcoin Cash as a trading option on Tuesday. However, with price and volume rising sharply in the run-up to the announcement, Coinbase has announced it is investigating allegations of insider trading.
In a blog post Coinbase CEO Brian Armstrong wrote, “It appears the price of Bitcoin Cash on other exchanges increased in the hours before our announcement.” According to Armstrong, Coinbase policy prohibited employees from trading any Bitcoin Cash for the last month. If anyone involved with the exchange has violated its policies Armstrong said he would “terminate the employee immediately and take appropriate legal action.”
Demand was so great on Coinbase’s launch that trading was stopped after only two minutes. Prices momentarily went to $9,500, $6,000 higher than on other exchanges. Trading will reopen today and is eagerly awaited.
Bitcoin Cash Demand
Bitcoin Cash works as something of a natural hedge for investors. As Bitcoin values have increased they can take some of their profits and diversify into Bitcoin Cash.
As media attention has focussed on Bitcoin these last few weeks there has also been an increasing awareness of Bitcoin’s current limitations as a useable currency, particularly the time and cost of transactions. In that framework alternatives like Litecoin and Bitcoin Cash become attractive as offering solutions to Bitcoin’s problems.
The recent appearance of noted Bitcoin Cash proponent Roger Ver on CNBC’s influential “Fast Money” program has likely led to increasing awareness of the Bitcoin alternative. With the Bitcoin markets relatively calm this week it seems that investors are looking to more dynamic markets to try and find a bargain.
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