Bitstamp, one of the oldest cryptocurrency exchanges, announced it will launch trading of Bitcoin Cash, a new currency that many Bitcoin supporters view as a rival.
“We get requests from our users who want to trade it,” said Bitstamp CEO Nejc Kodric. “We want to be as agnostic as possible so we look at the system, and if we believe there is sufficient demand and there will be trading and trading volume, we’re going to list it.”
Trading of Bitcoin Cash on Bitstamp, which is the third-largest in the world for U.S. dollar and euro trading of Bitcoin, begins in the next couple weeks. The move could indicate possible growing acceptance of a cryptocurrency that many hardcore Bitcoiners view as an unwanted stepchild of Bitcoin and potential threat to the top cryptocurrency.
It’s also significant because Bitstamp is one of the more conservative exchanges and currently only offers trading in the other four cryptocurrencies — Bitcoin, Ethereum’s Ether, Litecoin and Ripple’s XRP — that round out the top five by market capitalization. It was the first nationally licensed Bitcoin exchange, a designation that applied across all 28 European Union countries.
The near-clone of Bitcoin was created in August by a group of Bitcoiners who disagree ideologically with the future development plans for the original cryptocurrency. They instead support a certain method for increasing the number of transactions that can be processed on the network at any given time that is generally known as “big blocks.” Bitcoin Cash currently has a market capitalization of $20 billion compared to Bitcoin’s $137 billion.
Earlier in November, another so-called fork of Bitcoin was scheduled to occur that would have again created a new version of Bitcoin, this one containing elements of compromise for both camps across the ideological split. However, this plan, called SegWit2x, was called off, and so many of the ideologically driven big block supporters have instead begun pushing Bitcoin Cash.
“There are still people out there who think Bitcoin should have larger blocks, and right now Bitcoin Cash provides them with exactly that,” said Kodric. “I think that’s why some of the demand emerged — SegWit2x didn’t happen, so some of the attention pivoted toward Bitcoin Cash.”
Bitcoin Cash has come under criticism from the Bitcoin community for its small developer community, calling into question just how decentralized the cryptocurrency actually is. Many also believe that market manipulation may have pushed up the price of Bitcoin Cash over a brief period earlier this month when the price skyrocketed from a low of $650 on a Friday to a high near $2,500 the next day. It has since dropped to about $1,200, while a Bitcoin is worth roughly $8,200.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment. Disclosure: I own Bitcoin.]
Kodric acknowledged the suspicious activity but said it was impossible to prove. Instead, he noted that Bitcoin Cash’s trading volume has been roughly half that of Bitcoin, “so we would prefer to leave it to the market to decide.”
Kodric said that to list a cryptocurrency, the exchange evaluates its technology and the market supply and demand for that coin.
Regarding the politically charged atmosphere around Bitcoin and Bitcoin Cash, Kodric said that the exchange has not generally been supportive of the big block side, and did not sign the agreement to do the SegWit2x fork. “By listing Bitcoin Cash, we’re not endorsing anything,” he said. “We’re just a marketplace where people can go with their money. We’re not doing any harm to Bitcoin or anything beneficial to Bitcoin Cash.”
He compared the battle between the two sides to the cola wars. “Coca-Cola invented the sweet, dark, bubbly drink, then Pepsi copied everything 90-95% from Coca-Cola, and they marketed the recipe with bigger bottles — actually, similar to Bitcoin and Bitcoin Cash at the moment — and they did an aggressive marketing campaign to promote Pepsi, and a bunch of people went to the Pepsi camp and said it was a better drink. Maybe a similar thing is happening here. We’ll have two cryptocurrencies similar in the technology having vocal, strong and sometimes aggressive supporters. We’re in the business of allowing users to to trade whatever they want. We’re not taking any side.”