Two of the world’s largest digital currency exchanges have changed their minds and decided to support the new asset “bitcoin cash”, but customers will have to wait until January 2018 to gain access to their tokens.
“We’ve examined all of the relevant issues and have decided to work on adding support for bitcoin cash for Coinbase customers,” David Farmer, director of communications at Coinbase, posted online on Thursday. An almost identically worded press release was posted by GDAX.
“We are planning to have support for bitcoin cash by January 1, 2018, assuming no additional risks emerge during that time.”
Coinbase, which claims to have 9 million users, and its subsidiary the Global Digital Asset Exchange (GDAX) initially told customers they could not safely support the new crypto currency created on Tuesday on their exchanges, citing concerns about the asset’s stability and security.
However, the exchanges decided to change their stance due to customer demand and trading volumes, among other reasons.
Charles Hayter, chief executive and founder of digital currency comparison website CryptoCompare, says there is also an economic reason for the shift in stance.
“Some exchanges are realising that they are missing out on trading fees and also seeing an exodus of clients to platforms that do support bitcoin cash,” he told CNBC via email.
Some Coinbase and GDAX customers are unhappy with the exchanges’ decision and took to Twitter to express their frustration. Others decided to withdraw their funds from the exchanges due to their initial stance.
Every bitcoin investor was entitled to the same number of “bitcoin cash” tokens, but not every exchange or bitcoin payment company is accepting the new coin, or allowing it to be traded.
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Both Coinbase and GDAX say they are safely storing “bitcoin cash” tokens for their customers. Once the exchanges are able to support the new token, customers will be able to withdraw it but not be able to trade it on the exchanges.
And by the time they can withdraw the token, it may not be worth much. After hitting a high of $756.93 on Wednesday, the price of “bitcoin cash” has fallen by more than half and is currently trading at $318.48, a drop of 57 percent, according to the website CoinMarketCap. In comparison, the original bitcoin is trading at $2873.13.
Hayter warns the price is likely to fall further.
“The fervour and price rises within the first few hours can be blamed on slow supply reaching markets and excessive initial exuberant demand,” he said.
“The ability to short the market (bet on the price falling) should bring about more efficiencies as reality bites into the price.