Bitcoin cash dethroned Ethereum as 2nd-largest cryptocurrency during wild night of trading

Bitcoin cash reached an all-time high of $2,500 a coin early Sunday morning, surpassing Ethereum as the second-
largest cryptocurrency
on the market.
The coin was trading up 14.7% at $1,525 by 11:35 a.m. ET.

Bitcoin cash had a wild night.

The cryptocurrency skyrocketed to an all-time high of $2,500 a coin early Sunday morning. It also surpassed Ethereum as the second-largest cryptocurrency by market cap, according to CoinMarketCap.com.

Bitcoin cash, which notably split from the original bitcoin in August, was gaining on its sister coin up until about 2 a.m. ET on Sunday. It later shed about $1,000, and by 11:35 a.m. ET it was only trading up 14.7% at $1,525, slipping back below Ethereum's market cap.

Still, it was an impressive march for a coin that has spent most of its existence trading at $300 to $500. Ethereum's founder, Vitalik Buterin, even chimed in on the news in a tweet late Saturday night to congratulate the coin's main backers.

Congrats on this. Seriously... @ Vitalik Buterin

Bitcoin cash's rise appears to have come at the expense of bitcoin, which dropped to a low of $5,512 a coin overnight but was back up at $6,160 by noon.

Bitcoin hit a record high of $7,828 on Wednesday but has been sliding since developers behind an update known as SegWit2X revoked their support for the plan.

SegWit2X would have increased the size of the blocks underpinning the bitcoin blockchain network to enable it to process more transactions more quickly. Backers thought the plan would help the digital currency scale faster.

Cryptocurrency experts told Business Insider that backers of SegWit2X were most likely dumping their bitcoin and jumping on the bitcoin-cash bandwagon. Like SegWit2X, bitcoin cash was conceived to help bitcoin scale faster by increasing the size of its blocks.

"When you look at the trends, it does look like many SegWit2X supporters have switched to bitcoin cash," Abhishek Pitti, the CEO of Nucleus Vision, told Business Insider.

Kyle Samani, a managing partner of MultiCoin Capital, told cryptowatcher Laura Shin that numerous bitcoin whales, or wealthy bitcoin traders, were moving to bitcoin cash from bitcoin.

Here's Samani (emphasis ours):

"There were lots of bitcoin cash whales who were in early on bitcoin who were waiting to see what would happen with 2x. I know many Bitcoin OGs who have dumped $10m+ of BTC for BCH ... Turns out there were a lot more BCH ideologues than we all thought."

Samson Mow, the chief strategy officer at Blockstream who is a bitcoin evangelist, told Business Insider bitcoin cash's price pump would be short-lived.

Bitcoin cash "is just being pumped as many other altcoins have been in the past, and inevitably the pumpers will cash out," he said. "The pump is already losing steam and can't be sustained because there's no real market for [bitcoin cash]."