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A few days ago, the world’s most popular cryptocurrency wallet and exchange service, Coinbase, made a surprising announcement. Bitcoin cash, the offshoot digital token from Bitcoin, was now available for account holders to buy and sell. Immediately following the announcement, bitcoin cash shot up well over $4,000 before all  its transactions inside Coinbase were halted.

During the run-up, bitcoin cash hit a price tag of $8,500 on its consumer-centric platform, while the same cryptocurrency hit $9,500 on its GDAX trading platform. Coinbase later issued a statement that they were investigating a possible case of insider trading within its ranks. Allegedly, some employees or contractors knew about the bitcoin cash launch, and proceeded to buy up the digital tokens.

The mainstream media then added to the confusion by claiming that Coinbase accepting bitcoin cash was a complete surprise; hence, the alleged insider trading was based on particularly valuable information. As damning as this accusation sounds on the surface, the true story isn’t nearly as sexy. You see, Coinbase had announced that they would offer support for bitcoin cash as early as August of this year.

Thus, the insider trading wasn’t nearly as binary as the media claimed. Everyone knew that Coinbase would support bitcoin cash; the real surprise was how early that date came. Most expected sometime in January, and instead, we got it this month.

Okay, then…I can see how insider trading could benefit a little bit. Obviously, Coinbase users getting their bitcoin cash earlier than expected is good news. But is it good enough to spark a doubling of the price over a matter of two days?

Sure, cryptocurrencies move at lightning speed relative to traditional assets. We’ve seen many altcoins jump 100% or more within a 24-hour period. It’s not very common, but it’s not unheard of, either. Where I start to question the bitcoin cash rally is in the impetus. How fundamentally valuable is platform support coming in two or three weeks earlier than anticipated?

Also, I question the benefit of insider trading in this matter. Unlike traditional acts of insider trading where individuals trade off of privileged and material data, there was nothing special about the data itself; only the timing, which is relatively an insignificant matter.

Don’t get me wrong: I think Coinbase has done a “marvelous” job of screwing this up royally. And their employees and contractors should know better than to commit insider trading. Indeed, management should have had an all-hands meeting to discuss corporate ethics prior to the bitcoin cash launch, if one did not occur.

With that being said, the dramatic bitcoin cash rally is a tough one to explain. Although insider trading appears to be the answer, it also seems a little too convenient.

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