Bitcoin Cash on the verge of disaster due to proposed tax on miners
|- The proposed ideat to transfer 12.5% of miners' profits to a development fund may harm the ecosystem.
- The critical resistance is created by a psychological level of $400.00.
Bitcoin Cash, now the fourth-largest digital asset with the current market value of $6.6 billion has gained over 2.5% since this time on Monday. The coin hit an intraday high at $375.00 and retreated to $365.80 since that time. BCH/USD is moving within a short-term bearish trend amid expanding volatility.
Bitcoin Cash tax on developer may be a dangerous thing
The community has been discussing a proposal introduced by Jiang Zhuoer, the CEO of the largest BCH mining pool, BTC.TOP. He suggested that all BCHminers should voluntarily donate 12.5% of their profits to a dedicated Hong Kong-based fund that will use it to support the ecosystem development. The controversial proposal triggered a lot of critical comments. Some of the experts believe, that it would become a big mistake that could do more harm than good. Apart from centralization issues, this may result in a new type of token, Peter Rizun, the chief scientist at Bitcoin Unlimited, believes.
The Hong Kong company would then raise capital by disposing of its newly issued tokens, for example, by selling them to investors. A market for these tokens is guaranteed if key exchanges cooperate by running software to enforce the issuance to the Hong Kong company (e.g., blocks that did not issue tokens would not be considered legitimate BCH by the exchange). The proceeds from these token sales would then be used to fund further work by these developers to grow this BCH enterprise.
Basically, miners will receive 6.25 BCH as a block reward after halving. They would need to send 12.5% of their profits to the currently unknown Fund that will return them a new token which they can sell at a cooperating exchange. Then the FUnd would sell the taxed BCH to investors and finance the infrastructure development with the obtained proceeds. A complicated scheme that may bump into regulatory problems and ward off exchanges from taking part in it and force miners to quit the network.
BCH/USD: technical picture
On the daily chart, BCH/USD has created three green candles in a row; however, the downside potential is fading away as the price moves close to critical resistance levels. The bulls will have to clear $375-$377 to get a chance for an extended recovery towards $400.00. This psychological resistance is reinforced by the upper line of the daily Bollinger Band. Once it is cleared, SMA100 weekly at $446 will come into focus.
On the downside, a sustainable move below $300.00 will worsen the technical picture and open up the way to $260 area reinforced by SMA200 daily. This support is closely followed by a cluster of SMA50 and SMA100 1-hour on approach to $250.
BCH/USD daily chart
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