Grayscale’s Bitcoin Cash Trust Loses $1.6M after BCH Hard Fork
The Bitcoin Cash hard fork has pushed BCH price sideways with more sellers in the fray. The Grayscale Bitcoin Cash Trust reported a dip in the assets under management over the period of last week.
On Sunday, November 15, as a result of hard fork, the Bitcoin Cash (BCH) blockchain split into two Bitcoin Cash ABC (BCHA) and Bitcoin Cash Node (BCHN). The BCHA has put forward a new Infrastructure Funding Plan (IFP) that attracts an 8% “tax” on miner rewards which ultimately goes to the development fund.
However, the BCHA camp has received much support as a majority of the miners have started favoring the Bitcoin Cash Node (BCHN). The proposal by the BCHA network is unfavorable among BCH users who perceive it as an attempt against the community’s decentralized spirits.
A majority of the crypto exchanges faced no disruptions and seemed ready to accommodate the changes. However, Coinbase announced a temporary pause in deposits and withdrawals of BCH. As expected, a majority of the moners have leaned towards Bitcoin Cash Node (BCHN).
It is also clear that the Bitcoin Cash (BCH) community hasn’t received the hard fork in a positive manner. Right after the blockchain split, the BCH price crashed as traders remained uncertain of the network’s future. The BCH price crashed more than 5% after the network split going to $234 before recovering back marginally.
After BCH Hard Fork Grayscale Bitcoin Cash Trust AUM Drops by $1.6 Million
As the price of BCH went south, the total assets under management of the Bitcoin Cash Trust dropped by $1.6 million. Ever since the hardfork was announced, crypto users have been sending more BCH on the exchanges. As per industry reports, the exchanges have registered a net inflow of nearly $300 million worth of BCH tokens.
Interestingly, during this time, Grayscale seems to have added to its holdings of BCH shares. However, the value of assets under management for BCH Trust has decreased. As per Grayscale’s update last Friday, November 13, the Grayscale Bitcoin Cash Trust had total assets under management of $46.8 million. This was a drop of $1.6 million from its previous report on November 9.
While the majority of the crypto market has appreciated considerably this year, BCH remains a bit laggard in comparison to its peers. The BCH price has appreciated by 20% year-to-date and is currently trading at $248. Although not much, BCH still has given good returns when compared to other traditional assets. Bitcoin Cash (BCH) is the seventh-largest cryptocurrency by market cap.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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