Bitcoin Cash has soared in value over the past few days. To some people, this appears to be a clear artificial inflation of the price. Even though it is a fork of Bitcoin, BCH seems to have found its place in the market. With Antpool now “burning” some of the profits generated by the pool, price manipulation accusations are not hard to come by.
The Bitcoin Cash Price Surge
Over the past ten days, all cryptocurrencies have soared in value. One of the biggest gainers is none other than Bitcoin Cash. To some “experts”, this is a clear manipulation effort by the BCH team and its supporters. Especially Antpool is being singled out as a BCH price manipulator due to their most recent strategy. More specifically, the mining pool is burning some of its profits to reduce the amount of new tokens brought into circulation.
Doing so is nothing illegal by any means. The mining pool is reducing their own profits and not taking money away from Bitcoin Cash miners. It is a decision that will bolster the BCH ecosystem overall, but not everyone sees it that way. Some Bitcoin supporters are convinced this is another clear attempt at “pumping” the BCH price beyond what it should be valued at.
Given the ongoing spat between Bitcoin and Bitcoin Cash supporters, this decision raises a lot of questions. After all, there is no precedent for a mining pool to take such an unusual course of action. Right now, Antpool is destroying $12 worth of Bitcoin Cash every single day. This is not the biggest amount by any standards. It will not have much of a long-term impact on the overall Bitcoin Cash price either.
What Comes Next?
No one will deny the Bitcoin Cash price began to surge after Antpool’s tweet. The value has nearly doubled by now, which is rather impressive. At the same time, Bitcoin, Ethereum, and others have all surged in value as well. There’s no indication the burning of Antpool’s own profits has this kind of effect on the BCH price as of right now. Digital Asset Research analyst Lucas Nuzzi comments as follows:
“Now, projects like Bitcoin Cash are struggling to remain relevant, which is hard when very few users are using the network. Miners have to liquidate their holdings regularly to pay for their expenses. The move from Antpool is intended to slow down further price depreciation, by attempting to increase the perception of scarcity. Whether the move will be successful remains to be seen.”
There are some misconceptions over what this course of action means exactly. Some users are still convinced Antpool effectively reduces the Bitcoin Cash supply. That is partially true, but not in a spectacular fashion capable of pumping the BCH value to new heights. Even so, this decision has some impact on the market. An interesting PR stunt by Antpool, but nothing more than that.