• 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

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Cryptos feed

Latest Crypto News & Analysis

Editors’ Picks

Bitcoin Price Analysis: BTC bulls may hit a brick wall on approach to $9,800

Bitcoin (BTC) extended the recovery to trade at $9,750 at the time of writing. The first digital asset bottomed at $9,300 on February 19 amid massive sell-off and managed to regain some ground since that time. 

More Bitcoin News

Ripple Price Weekly Forecast: XRP/USD road to $0.35 mapped

As the week grinds toa halt, cryptocurrencies are rolling in a positive direction. The positive resonation comes after a couple of days that saw bulls paralyzed in the cryptocurrency market.

More Ripple News

Cardano launched hardfork OBFT; ADA/USD extends the recovery

Cardano (ADA), now the 11th largest digital asset with the current market value of $1.5 billion, has gained 2.7% in recent 24 hours to trade at $0.0590 at the time of writing.

More Cardano News

BCH/USD sprints to $380 amid development tax disagreements

Bitcoin Cash explored the region at $350 as I discussed in the previous article. However, the bulls quickly entered the market ready to buy low and push the price upwards. BCH/USD is already in the green ...

More Bitcoin Cash News


Bitcoin Weekly Forecast: BTC bulls plot the revenge

Bitcoin's market capitalization settled at $176 billion, which is 62.8% of the total digital assets market.

Read the weekly forecast