Coinbase enabled trading of Bitcoin Cash on Tuesday; users who had Bitcoin at the time of fork on August 1 will have equal balance in Bitcoin Cash
Context & Ripple Effects
Coinbase spent the fall walking back its initial refusal to touch Bitcoin Cash: after users threatened to sue over the lack of support once BCH reached roughly $7B in market value, the company reversed course within days of the fork and promised support by January 1, 2018.
Tuesday's launch delivers on that promise ahead of schedule — but lands on a chaotic day. Hours after trading opened, Coinbase temporarily disabled Bitcoin Cash trading on GDAX as BCH topped $8.5K there versus ~$3K on other exchanges, and the CEO ordered an internal investigation into whether anyone at Coinbase traded on advance knowledge of the announcement.
First-order effects
- Users who held bitcoin on Coinbase at the August 1 fork now have equal Bitcoin Cash balances they can trade, resolving the exposure that drove the August legal threats.
- GDAX traders face an active halt on BCH pairs after the exchange's price ran far above other venues, freezing positions mid-spike.
Second-order effects
- The pre-announcement price run-up puts Coinbase's own conduct under review, threatening the credibility of its listing process just as it reopens for business.
- Other exchanges' much lower BCH prices become the reference point customers use to judge whether Coinbase's market was fair, sharpening scrutiny of how listings move prices.
Third-order effects
- Fork handling is becoming a core exchange-governance test: who gets credited, when trading opens, and who knew beforehand now shape user trust and invite regulator attention, a pattern Coinbase extended in April by promising withdrawal support for additional Bitcoin forks across its properties.
The trend: Cryptocurrency exchanges are turning into de facto arbiters of fork legitimacy, with their crediting and listing decisions — and the trust questions those decisions raise — setting the terms for how splits get priced.