Your guide to trading Bitcoin Cash (BCH)

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Cryptocurrency trading guide Bitcoin Cash

Why is Bitcoin Cash important to traders?

Launched in 2017, Bitcoin Cash (BCH) has already established itself as a rather prominent player in the crypto market. Also known as Bcash within its community, it was quickly adopted by investors, and by the end of the first day of its existence, BCH became the third cryptocurrency behind BTC and ETH in terms of market capitalisation. Today, it keeps its strong position in the top five list.

Bitcoin Cash is arguably Bitcoin’s most successful offshoot, differing from the other versions of that time by enabling the increase of the block size from one MB to 32 MB. This feature was developed to make the technology more scalable, allowing to process more transactions per second and helping to support the use of the cryptocurrency not only as a store of value but also as a means of payment. Besides, Bitcoin Cash offers cheaper transfer fees per transaction than Bitcoin, which makes it more attractive to active investors and traders who transact crypto more often.

The project’s ambition is to make Bitcoin Cash a valid competitor of the industry’s behemoths such as Visa (V) and PayPal (PYPL) in terms of the volume of transactions processed.

Bitcoin Cash trading

Since its inception, the Bitcoin Cash network’s protocol and third-party infrastructure have grown rapidly, with many exciting projects and applications being built on and around the BCH chain.

Bitcoin Cash trading hours

You can trade Bitcoin Cash (BCH) CFDs on Capital.com 24/7.

How to trade Bitcoin Cash (BCH) CFDs

Wondering how to invest in Bitcoin Cash? Typically, an individual has two options when trading in the crypto market. Firstly, they can buy actual cryptocurrencies, such as purchasing Bitcoin Cash on an exchange such as Binance, Bitstamp, BitMax, Kraken, Gemini, or Coinbase, so they own the BCH themselves. This is considered a long-term investment, as the individual is waiting for the price to rise significantly, so they can later sell their BCH coins on an exchange for a profit.

Alternatively, they can trade a contract for difference (CFD) on a particular cryptocurrency and speculate on the price difference. A CFD is a type of contract, typically between a broker and an investor, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade. This is considered a short-term investment as CFDs are used within shorter time frames.

Investing in Bitcoin Cash CFDs gives you the opportunity to trade BCH in both directions. You can either hold a long position, speculating that the BCH price will rise, or a short position, speculating that the price will fall. Therefore, regardless of having a positive or negative view of the future of the Bitcoin Cash price, you can try to profit from both upward and downward fluctuations.

For instance, to participate in the BCH trade through CFDs, you can speculate on the BCH/USD pairing.

Trade Bitcoin Cash to US Dollar - BCH/USD CFD

There are pivotal differences between buying a cryptocurrency and trading a CFD in the crypto market. When buying a cryptocurrency, it is stored in a wallet. On the other hand, when trading CFDs, the product is stored in your account, which is regulated by a financial authority. You are more liquid when you purchase CFDs as you are not tied to the asset: you have merely purchased the underlying contract.

Looking for a reliable CFD trading provider to invest in Bitcoin Cash? If so, just spend three minutes of your time to sign up and start your journey of BCH trading with Capital.com. Try our award-winning trading platform or download our mobile app, which will become your smart CFD trading assistant.

What is Bitcoin Cash? What is cryptocurrency?

A cryptocurrency is a digital asset conceived for use as a medium of exchange, which uses cryptography to secure transactions, control the supply of additional units and corroborate transfers. In short, cryptocurrency is a decentralised electronic currency.

Bitcoin Cash cryptocurrency was launched in August 2017 as a result of a hard fork of the Bitcoin blockchain. It was created by a group within the Bitcoin community looking to re-establish Bitcoin’s initial promise of peer-to-peer electronic cash.

Bitcoin Cash underwent another fork in November 2018, splitting into Bitcoin SV (BSV) and Bitcoin Cash ABС, which is the Bitcoin Cash (BCH) that we know today.

Trade Bitcoin Cash

Technically, Bitcoin Cash is quite similar to Bitcoin in many ways. They both employ Proof of Work (PoW) as a consensus mechanism with a focus on the SHA256 algorithm. Moreover, they both feature reward halving at predetermined times and have a total maximum supply of 21m coins.

However, unlike Bitcoin, Bitcoin Cash has a much bigger capacity of blocks, allowing more transactions to be carried on its blockchain. This difference makes them un-interchangeable and, therefore, discrete and independent cryptocurrencies.

Why trade Bitcoin Cash CFDs with Capital.com?

Advanced AI technology at its core: a Facebook-like News Feed provides users with personalised and unique content depending on their preferences. If a trader makes decisions based on biases, the innovative News Feed offers a range of materials to put them back on the right track. The neural network analyses in-app behaviour and recommends videos, articles and news to help polish your investment strategy. This will help you to refine your approach when trading Bitcoin Cash.

Trading on margin: providing trading on margin (up to 1:2 for cryptocurrencies) with the help of CFDs, Capital.com gives you access to the cryptocurrency market even with a limited amount of funds in your account.

Trading the difference: when trading BCH CFDs, you do not buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of the Bitcoin Cash price. CFD trading is nothing different from traditional trading in terms of strategies. A CFD investor can go short or long, set stop and limit losses and apply trading scenarios that align with their objectives.

All-round trading analysis: the browser-based platform allows traders to shape their own market analysis and forecasts with sleek technical indicators. Capital.com provides live market updates and various chart formats, available on desktop, iOS, and Android.

Focus on safety: Captal.com puts a special emphasis on safety. Licensed by the FCA and CySEC, it complies with all regulations and ensures that its clients’ data security comes first. The company allows you to withdraw money 24/7 and keeps traders’ funds across segregated bank accounts.

Bitcoin Cash price history

Bitcoin Cash performance

Bitcoin Cash started trading on August 1, 2017, with the opening value of about $290 per coin. The new cryptocurrency immediately hit the top of the ratings in terms of market capitalisation, with its price more than doubling the next day to reach a $756.93 mark. The coin ended its second day of trading at $452.66, boasting of a market cap of 7,460,771,889. By August 19, its value soared to $1,091.97.

After peaking at this price, BCH started to depreciate gradually. By the middle of October 2017, it fell below the $315 mark as many people who had originally held BTC started to sell BCH coins they received at the hard fork.

Then, the great reversal of the entire crypto market happened. Bitcoin Cash was at its highest level at the end of 2017. On December 20, it skyrocketed to an intraday high of $4,355.62 and ended the day at $3,923.07. However, the upside momentum was short lived and, in less than a month, the BCH price fell to trade below $2,000.

After rising from $621 in April 2018 to $1,838 in May 2018, the coin started to drop in value yet again, eventually plunging 88 per cent to trade around the $540 level in August 2018.

The same year, on November 15, a hard fork chain split of Bitcoin Cash happened. On this day, BCH traded at about $430 and Bitcoin SV – at $96.50. Amid the ongoing crypto market sell-off, the BCH price fell below $80 per coin on December 15, 2018.

As the market started to recover slowly, Bitcoin Cash appreciated to $522.09 by the end of June 2019. However, another price decline was not long in coming, with BCH plummeting to $210 by the end of the year.

The market experienced a boost at the beginning of 2020, seeing Bitcoin Cash trade in the upward trajectory. On February 14, BCH was worth $493.03. However, once the Covid-19 pandemic hit the world, all the financial markets tumbled amid the increased economic uncertainty. Cryptocurrencies were not an exception. On March 13, the Bitcoin Cash price plunged to $139.22 per coin. In the following days, the cryptocurrency escalated to end the month at $220.

On April 8, the cryptocurrency underwent its first block reward halving, with its value seeing modest gains and closing the day at $266.24.

Always stay on top of the latest BCH price developments with Capital.com to spot the best trading opportunities.

FAQ

Storing BCH: what is a wallet? Why do I need it to store cryptocurrency?

Before buying BCH, you will need a place to store it. This is what a wallet is for, and it consists of two elements: a private key and a public address. A wallet requires a private key, specific to the individual, that enables access to the BCH address stored in the wallet, which is also the public key. The wallet is what enables BCH, or any cryptocurrency, to be a secure medium of exchange. Essentially, people can send BCH to certain wallets using the public key, which only the individual can access with their private key. Some individuals choose to keep their coins in their wallet provided by their cryptocurrency exchange, due to the fact that a lot of exchanges have mobile apps that allow people to easily buy, sell and spend cryptocurrencies.

What are the dangers of storing cryptocurrencies?

Cryptocurrency exchanges or online wallets are far from immune to the dangers of cybertheft. The infamous case of the Mt Gox Bitcoin exchange highlights this. Historically, Mt Gox was the largest global exchange for Bitcoin, until it declared bankruptcy in 2014 after its security had been compromised. Mt Gox had 850,000 Bitcoins, valued at $450m in February 2014, before its exchange was emptied by hackers. It is believed that the private keys of Mt Gox’s digital wallet were stolen from as early as 2011.

These risks are avoided when trading BCH CFDs because you do not need a wallet.

Is there a bubble in the cryptocurrency market?

A “bubble”, in market terminology, is where the price of an asset far exceeds its intrinsic value. For instance, the dot-com bubble that occurred between 1995 and 2001, is a prime example, where information technology industry firms saw their stocks rise, merely because of the market sentiment around that particular industry, irrespective of their profits or chances of succeeding. This market then crashed in March 2000.

The problem here is that it is hard to determine the value of the cryptocurrency to begin with. Although a lot of investors are holding cryptocurrencies as if they were equities, they are not. Yet, they do not particularly act like currencies either, which makes comparisons to currency valuations difficult.

However, with any new technology, caution is advised. It could well be the case that the valuations of Bitcoin or Bitcoin Cash are not overvalued, and that the bubble, if there is one, is represented by the various new cryptocurrencies that are being driven by market sentiment. Arguably, this is comparable to the dot-com instance, where stocks such as Amazon were not overvalued, but others (such as Pets.com, which went from IPO to liquidation in 268 days) clearly were. So, it seems that only time will tell whether the market is overheating, but in either case, there are options to trade using CFDs to take both long and short positions.

From late 2017 to early 2018, there was a surge in the price of Bitcoin (reaching $20,000 per BTC), followed shortly behind by other cryptocurrencies. The market then crashed between January and February 2018, and Bitcoin fell free, dropping 65 per cent in value. Consequently, most other cryptocurrencies crashed as well.

So, there clearly was a bubble in the crypto market. The question that this implies is whether there is another one on the verge. The value of most cryptocurrencies is derived from their potential; how they could be used to advance society in the future. Without institutional acceptance however, the potential value will remain merely potential, but whether this implies that cryptocurrencies are overvalued is another question.

What was the cryptocrash of 2018?

The 2018 crypto crash was the biggest sell-off of most cryptocurrencies in the history of the market. From January 6 to February 6, BTC shed about 65 per cent. Consequently, nearly all other cryptocurrencies crashed. The cryptocurrency market capitalisation lost at least $342bn in the first quarter of 2018.

Bitcoin peaked at the $20,000 mark in December 2017, with most other cryptocurrencies surging shortly after. There were several shocks that ultimately contributed to the cryptocrash. BTC price depreciated by about 12 per cent after the Attorney General for South Korea announced a move to ban crypto exchanges from issuing new trading accounts, and later that month Coincheck (a Japanese Bitcoin wallet and exchange service) was hacked and approximately 500 million NEM tokens (worth $530m) were stolen, making this the largest crypto hack to have occurred.

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