Apr 18, 2021
Bitcoin Cash and Why It Skyrocketed
Which is the better investment?
The story of Bitcoin is one of many ups and downs. Yet, even when it finally broke through and settled around the $60k valuation we see today it came with a host of new problems.
Bitcoin’s parabolic growth in value caused fees to rise and network congestion to skyrocket.
This is where the many forks of Bitcoin come into play.
What is Bitcoin Cash?
There are a few forks of Bitcoin that serve to resolve these issues of congestion. Litecoin is probably the most notable, while Bitcoin Cash (BCH) sits a little further down the rankings.
BCH is what I want to talk about today. But first some specifics on how it differs from Bitcoin —
Bitcoin uses 1MB block sizes, which limits the number of transactions that can occur at any given time. Bitcoin Cash initially upped this to 8MB and has since gone further to 32MB. This has BCH sitting at around 27 transactions a second. It stands to reason that a faster network makes it more appealing as a currency option.
Although transaction fees and times can vary depending on network congestion, the current average fee is $27. This isn’t a huge deal to people holding a large amount, but for those just getting into the game, it can be tough.
On top of that, it makes it difficult to spend smaller amounts to purchase goods.
This is where Bitcoin Cash also differs from Bitcoin. BCH’s fees sit typically under a cent, making it much more reasonable.
The Value Of BCH
Like most coins, BCH saw most of its upward momentum begin around the new year. It started the year at $341 and quickly shot up to $500 by February.
For much of the year, it has sat reliably around at that range. It only saw a brief surge to $700 back in February before settling down again.
But something changed recently as it rode a 65% seven-day rise to its current price of $1031. A far cry from its all-time high of $3785 three years ago, the progress is nothing to scoff at.
Why I think Bitcoin Cash Has A Bright Future
I believe this recent surge can be attributed to smaller retail investors finding reliable options outside of the BTC/ETH bubble. It’s becoming harder to get a noteworthy slice of Bitcoin as the price continues to slowly grow which is causing some to look elsewhere.
Cryptocurrency has a lot of projects that are growing right now, but BCH has remained at a consistently high value. As prices and fees add up, it becomes tougher to invest in the heavy hitters. That’s why I think something like Bitcoin Cash can be a good choice and will continue to grow.
Furthermore, BCH is a pragmatic token that gives it additional value.
It allows growth as it serves a purpose rather than just existing a store of value. In this case, the purpose is its ability to be spent on real-world products. Adoption is a big part of BCH’s value since it provides a more true to vision digital cash option.
The amount of online and brick-and-mortar merchants that accept BCH has grown significantly as of late. You can check out a good map of them here. It is worth noting that many vendors do also accept Bitcoin. However, I think the benefits of BCH will ultimately win out and we’ll see more adoption in the years to come.
Although I do expect a sizeable correction to come sometime this year, I don’t see it dropping back down to its previous value. I have high hopes for BCH to find a new floor and eventually grow even further than we’re already seeing.
This is not financial advice. All investment strategies and investments involve risk of loss. Nothing contained in this publication should be construed as investment advice.
