Over the last 24 hours, Bitcoin cash (BCH) saw an 11% increase in its value, while bitcoin experienced a decrease.
The recent slump in Bitcoin’s price follows an increase in network congestion that drove transaction fees up over the weekend as demand for Bitcoin transactions rose.
Some market observers are claiming that Bitcoin Cash (BCH), a spinoff of the Bitcoin blockchain designed to be more scalable and cost-effective, has benefited from the backlog of Bitcoin transactions.
On Tuesday, BCH, which was previously trading at a rate of over $122, was one of the few digital assets to remain in the green.
Kyle Doane, an Arca trader, speculated in a note that due to high fees and congestion, there could be some spillover from Bitcoin to Bitcoin Cash. However, Doane acknowledged that the increase in Bitcoin Cash’s value is likely to be short-lived.
Due to the large amount of Bitcoin transactions over the weekend, Binance, the world’s largest crypto exchange, had to temporarily stop allowing Bitcoin withdrawals.
Laurent Kssis, crypto advisor at CEC Capital, expressed his doubts that the increase of Bitcoin Cash (BCH) is due to bitcoin’s network congestion. He commented, “I’m not confident that BCH’s rise is related to bitcoin’s network congestion as the effect on BTC is not that severe.”
Kssis stated that although Bitcoin (BTC) was dropping, this had been expected for a few days.
Bitcoin was trading around $27,600 on Monday, roughly the same as it was at the start of the month. The largest cryptocurrency by market capitalization was near $30,000 last week.
Kssis believes that the recent increase in the value of Bitcoin Cash is not likely to be sustained and that it will likely drop back down to roughly $110.