Bitcoin Cash Market Frozen After Insider Trading; Value Drops Below 17K

"It appears the price of Bitcoin Cash on other exchanges increased in the hours before our announcement".

"If we find evidence of any employee or contractor violating our policies - directly or indirectly - I will not hesitate to terminate the employee immediately and take appropriate legal action", said Armstrong in his blog.

Insider trading in the run-up to the actual launch is one thing; what happened during the actual launch is another.

Shortly after trading opened, the price of bitcoin cash rocketed to a high of $8,500, more than double what it had been on Monday. "We made this decision to ensure a fair and orderly market".

That makes it rough for those whose orders were executed at the inflated price.

Total cryptocurrency market capitalisation has passed $600 billion.

While Coinbase briefly enabled orders to be posted in USA dollars on its platform for more sophisticated traders, it suspended the facility after two minutes due to 'significant volatility, ' the company said in a blog post. Coinmarketcap placed a red flag on that price and refers to it as "excluded", noting there was an "outlier detected". Bitcoin Cash is bouncing around the $3,300-$3,500 range on Coinbase and GDAX.

Although Bitcoin remains highly volatile, investors may panic less during short-term price swings if the liquidity of the cryptocurrency improves. Though it's still available for trade on other exchanges, Coinbase hasn't restored the option to buy or sell it as of Wednesday afternoon.

Armstrong said that all Coinbase employees and contractors were "explicitly prohibited" more than a month ago from trading in bitcoin cash and from revealing launch plans.

Bitcoin Cash is the creation from a fork in the Bitcoin blockchain that took place on August 1, 2017.

Bitcoin cash works faster than traditional bitcoin in terms of transaction speeds, and costs are lower. Most of the Bitcoin community stuck with the core developers, however, who have not yet settled on a way of moving the platform further. The 2x fork was supposed to double the block size on the chain to 2MB and change other protocols. Coinbase, which at one point this month was the top free application in Apple's App Store download ranking, already offered ethereum and litecoin in addition to bitcoin. An account for Whalepool, which describes itself as a community of day traders focused mainly on bitcoin and other cryptocurrencies, commented, "Very unusual accumulation and pump on Bcash in the hours leading up to the @Coinbase BCH add".

For the sake of full disclosure, the author holds tiny positions in various cryptocurrencies that are not believed to color his views.

  • David Armstrong