- Bitcoin Cash is up 17% against the dollar on Monday.
- The cryptocurrency has risen 80% over the last seven days.
- An upcoming 'fork' of the currency — a change to its underlying code — appears to be supporting the price rally.
- Follow the live Bitcoin Cash price on Markets Insider.
LONDON — Cryptocurrency bitcoin cash has been rallying strongly over the last week and is up another 17% on Monday.
Bitcoin cash, which was spun-off from bitcoin last August, has risen over 80% against the dollar over the last seven days and it up 17% at 11.43 a.m. GMT (6.43 a.m. ET):Markets Insider
The rally appears to be driven by an upcoming bitcoin cash fork — industry speak for another currency being spun out of the underlying code that runs a cryptocurrency. The fork aims to increase the processing power of bitcoin cash by increasing the size of the blocks of transactions that are processed.
Mati Greenspan, an analyst with trading platform eToro, said in an email on Monday: "Bitcoin cash is moving towards a hard-fork on May 15th. The planned fork that will increase the maximum block size from 8 MB to 32 MB and will also remove the SegWit protocol.
"However, those looking to get a new coin or "dividend" out of this fork may be disappointed. If all goes smoothly, the new coin that is created from the fork will completely replace the old coin. Though there may be some who try to keep the old BCH alive, they will very likely be the minority. That said, there will be no free lunch, and no chain split unless things go terribly wrong.
"Still, many crypto traders have the last few bitcoin forks permanently etched in their minds and associate hard forks with rising price and so the momentum is snowballing at the moment, especially in markets such as Japan and South Korea."
Greenspan pointed to spiking volumes for bitcoin cash trades in Japanese yen and Korean won over the last few days. However, he added that trade in these currencies remains a small sliver of the market and is likely only contributing to continuing momentum in the market, rather than driving it.
Charles Hayter, the CEO of CryptoCompare.com, pointed to a move by Chinese bitcoin giant Antpool to restrict supply of bitcoin cash as helping to underpin its rally.
"On the fundamental side on the 20th Antpool mining said they are burning (sending BCH to dead addresses) 12% of mining fees, which is a signal to the market that supply will be made scarcer," Hayter told Business Insider in an email. "However, a quick look at the mining figures and this equates to only $12k burnt per day."
He added: "Last week Bitpay added support for BCH on their point of sale app 'Checkout'. [And] Memo, a social media platform, uses BCH and launched on the 15th."
Bitcoin Cash is the fourth largest cryptocurrency by market value, with $23 billion in circulation.
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