Bitcoin cash increases by the day or even hour lately, while its predecessor bitcoin continues to fall. However, traders of the cryptocurrency could have a serious problem on their hands, as the sudden increase in price may have been manufactured. An investigation into the bitcoin cash increases is underway at a major cryptocurrency exchange this morning.
Bitcoin cash increases to $9,500
The value of bitcoin cash exploded on Tuesday night after Coinbase surprised cryptocurrency enthusiasts by announcing that its users can buy and sell or send and receive it. However, the trading of bitcoin cash on Coinbase was short-lived, as the cryptocurrency exchange halted it and launched an insider trading probe.
Market watchers noticed this week that the recent bitcoin cash increases seem to be coming at the expense of bitcoin because investors were starting to rotate out of it and into other cryptocurrencies, including bitcoin cash. On Tuesday night, bitcoin cash surged over $3,000, setting a new record high.
Bitcoin cash was created after bitcoin forked in August, and bitcoin owners began receiving tokens—one bitcoin cash for each bitcoin they owned. However, at the time that happened, Coinbase didn’t support the new cryptocurrency, so those who used the company’s digital wallet didn’t receive their tokens. When the exchange announced last night that it would start supporting the new cryptocurrency, it also said that anyone who held bitcoin in their Coinbase wallets when it forked will finally get their tokens, the company announced in a statement last night.
Were those bitcoin cash increases driven by insider trading?
Although bitcoin cash was already rising steadily before Coinbase enabled trading of it last night, it was trading at a significant premium on the platform versus the rest of the market. At one point, the cryptocurrency reached as high as $9,500, according to Business Insider. Just four minutes after enabling trading of the cryptocurrency on its Global Digital Asset Exchange (GDAX), Coinbase halted it. At the time of the trading halt, bitcoin cash was trading at around $8,500, reports the BBC. Just four minutes before at the moment the exchange enabled trading of it, the price was only $3,500.
Coinbase CEO Brian Armstrong said in a post on Medium that they noticed sudden bitcoin cash increases on other exchanges in the hours just before they announced that they would be enabling trading of it. The cryptocurrency exchange has now launched an insider trading probe to investigate those allegations, and Armstrong said he wouldn’t hesitate to terminate the employment of anyone found to be violating their policies and “take appropriate legal action.”
According to Coinmarketcap, after the recent bitcoin cash increases, it now has a market capitalization of around $59 billion.