What Is Bitcoin Cash? Should You Be Investing In It In 2018?

Last Updated April 30th 2019

There has been a lot of buzz in recent weeks and months about bitcoin cash, but you may not know exactly what it is, or whether or not it is a worthwhile investment. Trading Education is here to demystify this burgeoning cryptocurrency and to equip you with all the details you need in order to make an informed decision about investing in bitcoin cash.

Understanding Bitcoin Cash

Bitcoin cash (BCH) is not to be confused with bitcoin (BTC). The two cryptocurrencies are linked, but they are not the same thing. Bitcoin cash developed when there was a disagreement among bitcoin users as to how the currency should be handled during its rapid growth. BCH is a 'hard fork' of the original bitcoin blockchain, created in 2017 when the cryptocurrency was split in two. Bitcoin itself continued under its fixed set of rules, while bitcoin cash developed its own distinct set of trading rules and acquired its own path of growth in the process.

While bitcoin remains the largest of all the cryptocurrencies, bitcoin cash comes in at a fourth place. It is valued slightly higher than Litecoin, based on its market cap, but falls just short of Ripple and Ethereum. At the time of writing, bitcoin cash was trading at $1,766 per unit, while bitcoin is trading at close to $11,500. Bitcoin cash has an estimated market cap of $21.65 billion as of March 2018. It was added to Coinbase, a leading cryptocurrency exchange, in late 2017 - ahead of larger cryptocurrencies like Ripple.

bitcoin cash

Should you invest in Bitcoin Cash?

Investors remain wary of bitcoin cash, and it is generally viewed as one of the more unstable cryptocurrencies on offer. It has a higher block size, facilitating faster transactions and verifications, but it is seen as less secure for this reason. Some see bitcoin cash as undermining the original bitcoin blockchain, and that it has little investment potential due to other, stronger cryptocurrencies cannibalising the current market.

However, others see bitcoin cash as a solid investment thanks to its steady growth. While it may not be the ideal long-term asset to hold due to the chance it will undergo a rapid decline in value, it also holds the potential to grow quickly if demand for the currency picks up. BCH investors face a significant gamble, but there is a chance of a large payoff - and for this reason, it might just attract some serious investors during 2018.

See also: What Cryptocurrency Should You Be Buying in 2018?

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