Bitcoin Cash has seen its hashrate plummet after its halving event as miners leave the network in droves.
Bitcoin Cash’s halving event took place last week and, despite a small bump in price, the gains have completely evaporated. Even worse, miners are leaving the ecosystem resulting in a crash of the network’s hashrate.
Bitcoin Cash Hash Rate Plummets
The drop in hashrate for Bitcoin Cash (BCH) has been nothing short of drastic. Since April 6, it has fallen some 60% to lows not seen since April 2019.
The halving seems to have intensified selling pressure. Some analysts fear that this may be a bad sign for what’s to come for Bitcoin after its own upcoming halving next month.
Others, however, are not as convinced. According to a bold prediction from Morgan Creek Digital, Bitcoin will go lower into its halving before climbing to all-times in September.
At the time of writing, Bitcoin Cash is trading for $221 and is down 4.33% on the day along with the rest of the market mostly in the red today. Despite the sudden spike to $276 on April 8, the halving has not been able to create any sustained bullish momentum.
Could it Be Capitulation?
It’s still too early to tell whether or not Bitcoin Cash miners are moving to ming Bitcoin. However, Bitcoin’s own hashrate continues to tick upward after hitting a local low in mid-March.
As analyst Mati Greenspan (@MatiGreenspan) writes, this could be the capitulation event for Bitcoin Cash’s hashrate — assuming that it drops lower. We could, therefore, see a further decline in Bitcoin Cash’s price.
Bitcoin Cash hashrate capitulation.
After the halving on April 8th, it's no longer profitable to mine BCH causing many miners to switch over to BTC. pic.twitter.com/vISDMX5l7z
— Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) April 13, 2020
At the current time, conducting a 51% attack on the Bitcoin Cash blockchain is easier than ever. Using rented hash power, a malicious actor could do so for less than $10,000. That’s incredibly cheap for a cryptocurrency project with a market capitalization of $4 billion.
The long-term security, therefore, remains in serious doubt. Even worse, it may be a bad sign for Bitcoin. As one Reddit user writes, Bitcoin Cash adjusts its difficulty every 24 hours whereas BTC adjusts it every 14 days — if BTC were to suffer a similar hashrate crash post-halving, it would be disastrous.
BTC’s halving is set to take place in mid-May.