Don’t fork in a bear market and don’t support a “fake” fork might be good advice moving forward seeing how the BSV fork has so far unfolded.
BSV and BCH were meant to trade at a higher combined price than pre-split BCH under the assumption that the coins on their own would satisfy more people than the unspilt coin.
That has been the case for the previous two big splits, but not here. Although it might be too early to say whether that will change, BCH is currently at circa $280 while BSV is at about $100, making it a combined $380.
That compares to BCH’s price being at circa $600 prior to the split. Making this a split of little more than the price which is now down nearly 50%.
Other coins, moreover, were not really meant to be affected and if they were affected one would have thought it would have been at BCH’s gain.
Instead, all top cryptos have kind of crashed, with BCH crashing the most, making this the worst fork ever for it appears to have destroyed value rather than create it.
One reason for it might be the reverse indicator. If one expected this split to go like previous splits then that makes it too predictable so sort of the exact opposite has happened.
Yet that might be subjective nonsense. The real reason is probably because the market, perhaps rightly, thinks that BSV is just not good for the crypto space.
There is no reason for this coin to exist, at all. For the BTC-BCH split there were genuine disagreements on how to tackle scalability with the disagreement being fundamentally about the unpredictable: how Moore’s law would unfold or how node distribution may change with an increased number of users.
For the ETH and ETC split, likewise, there was a genuine disagreement over whether there should be a network wide coordination to change past events, with the question there too being about the future regarding a potential politicizing of neutral and objective code which some said shouldn’t be changed while some said it is still too early, so we should.
As these splits kind of created different “realities” in an A/B test of sorts, with no right or wrong answer except for what experience will eventually say, the market welcomed them and rewarded both split cryptos as well as all cryptos in general.
Here instead the market has punished all cryptos and has punished most severely the cryptos in question: BCH and BSV.
Now it may be a bit too early to say whether that is indeed the case as bitcoin also fell on the day of the split, but it was stable immediately prior and gained quite a bit the days beforehand.
One can argue however than in the BCH/BSV split, there is no genuine disagreement, no argument about the future. It’s more of a fake split.
That split now means an alleged fraudster can just go and found nChain or whatever company and can go create his own coin while temporarily gaining the attention of everyone.
Meaning he has shown a somewhat successful social attack vector whereby chaos for a main coin can be created while not needing an actual reason or genuine disagreement.
Calvin Ayre, moreover, quite stupidly backed nChain’s now clearly empty threats of 51% attack. It may well be the market was trying to pre-empt any entertainment of the idea by sort of warning through a price fall.
So it is too early but perhaps we have seen the first value destroying fork. The reason may be because the crypto space doesn’t benefit from Craig Steven Wright (CSW) being in charge of any crypto.
At current price BSV may gain a market cap of about $2 billion, making it a top ten coin. BSV, however, doesn’t quite have any aim except for perhaps stealing old coins or burned coins and kind of loud-mouthing positions that many would say are the opposite of crypto.
That might not reflect very well on the entire crypto space. So the market is not rewarding this fork, but punishing it.
The question is what happens next. Well, first, exchanges need to open BCH and BSV deposits and withdrawals. In a very unscientific poll we held, most seem to think they should wait but BCH miners have now clearly shown they have the upper hand.
Once the markets do open then we’ll see how BCH and BSV will be judged. Then BSV will probably dwindle down the rankings, with the coin not really having any backing, but CSW is gifted in his own way so who knows.
BCH here hasn’t played their cards very well. That may be because their community is pretty small compared to BTC or ETH and it may be because they’re sort of split between ABC and Bitcoin Unlimited (BU) in addition to XT and Classic with all four teams sort of pretty much openly competing in a fairly hostile manner.
So their response hasn’t been as strong as it could have been because they haven’t quite shown a united front with BU for example even now saying they are willing to collaborate with CSW’s nChain.
Meaning that non-genuine splits can be bad especially if the splitters are paid any attention. The ultimate loser here however is Calvin Ayre who was happy mining on BCH and now is mining at quite a loss on BSV.
Making this example perhaps useful for the future as it shows that making up excuses to split doesn’t necessarily end well as the market clearly can’t quite be fooled.