Recent reports have shown that Bitcoin Cash has a low commercial use, 56% of its total supply being controlled by 67 individual wallets. What’s more, the coin has suffered an 87% drop from its highest market cap value.
Bitcoin Cash just passed its one-year anniversary since it split from the Bitcoin Core blockchain. Although a forked coin, many supporters including early Bitcoin adopter Roger Ver continue to see BCH as the ‘true Bitcoin.’
Ver stated in a phone interview:
“That’s what actually gives [bitcoin cash] its underlying value, that you can use it in commerce to pay for things. Whereas, a lot of these other tokens out there just kind of turn into speculative assets that don’t actually have any utility.”
But these statements have been proven wrong by the current way the market is going. Chainalysis senior economist Kim Grauer talked about the first year of Bitcoin Cashin a Bloomberg interview, as well as Ver’s claim that BCH had a high use as a payment method. By reviewing 17 of the most-traded exchanges she found out that:
“Bitcoin Cash payments slumped to $3.7 million in May from a high of $10.5 million in March. Bitcoin payments totaled $60 million in May, down from a peak of $412 million in September.”
Grauer has reasons to believe that a majority of BCH ownership belonging to individual wallets could be why Bitcoin Cash is seeing such a low adoption rate, stating:
“About 56 percent of Bitcoin Cash is controlled by 67 wallets not located on exchanges. Of those, two wallets hold between 10,000 and 100,000 Bitcoin Cash. And chances are, the wealthiest holders are the ones sending a lot of the traffic to merchant services.”
When compared to Bitcoin, Bitcoin Cash has far fewer blockchain transaction, especially when you take into consideration its maximum block size limit.
Bitcoin Cash has also been greatly affected in terms of market dominance and market cap. Bitcoin Cash reached its all-time high of $3,700 after Coinbase listed the coin at the end of 2017 and has since gone down to $528, which represents an 87% loss in market cap.
And it seems that August is not a favorable month for Bitcoin Cash, as a ‘Bitcoin Core’ developer noticed a vulnerability in BCH’s consensus code which could have wreaked havoc in its blockchain.