Learn more about the pros and cons of investing in Bitcoin Cash so you can work out for yourself if it’s worth investing in.
Interested in Bitcoin Cash investing? Wondering about the pros and cons of investing in Bitcoin Cash and its potential to be a millionaire-maker? Here is all you need to know about BCH investing.
Bitcoin Cash is one of the most popular coins in the crypto market and currently ranks twenty-six by market capitalisation, according to CoinMarketCap and can already be said to be a millionaire maker.
But while there are many reasons to invest in Bitcoin Cash, the cons of BCH’s cons must be considered so that investors invest the right amount.
So, let’s dive into the complexities of Bitcoin Cash - one of the most controversial coins in the cryptocurrency sector.
Contents
In this article, we will cover:
The Pros of Investing in Bitcoin Cash
The Cons of Investing in Bitcoin Cash
Is Bitcoin Cash a Good Investment?
Is Bitcoin Cash BCH a Safe Investment?
Is Bitcoin Cash Investing Worth It?
How Much Should I Invest in Bitcoin Cash?
Will Bitcoin Cash Be a Millionaire Maker?
What Is Bitcoin Cash?
Bitcoin Cash is a cryptocurrency launched in 2017 as a fork of Bitcoin to resolve the scaling problems caused by Bitcoin’s popularity (or when the backend can’t handle the growing amount of work and users).
Here we should note that a hard fork refers to a significant change to a network’s protocol that leads to the development of two blockchains.
The last block that Bitcoin and Bitcoin Cash shared was Block 478558. From that point onwards, they have been different projects.
However, there are many similarities between Bitcoin and Bitcoin Cash. Both are proof-of-work (so new coins are mined), use the same hashing algorithm (SHA-256), go through a halvening (or halving) every four years, and have a 21-million-coin cap.
What Does Bitcoin Cash Do?
Bitcoin Cash was designed, as stated above, to help Bitcoin resolve its scaling problems and improve its speed and effectiveness.
Bitcoin Cash’s blocks were designed to be eight times (8 MB) larger than Bitcoin’s (1 MB) and were then further increased to 32 MB per block.
Larger blocks can increase transaction verification times and allow the network to handle more transactions per second because they can fit more transactions.
In contrast, Bitcoin has blocks of 1 MB, which aims to improve security instead of speed. The problem is that Bitcoin processes only about seven transactions per second, with 1-MB blocks added every 10 minutes.
This makes Bitcoin inefficient for a global economy, especially when compared to Visa and other payment methods.
Though Bitcoin has various notable forks, including Bitcoin XT, Bitcoin Classic, and Bitcoin Gold, Bitcoin Cash is still the largest Bitcoin fork by market cap and is the most well-known.
Bitcoin Cash’s native currency BCH is much cheaper than Bitcoin (BTC). Currently, one BCH trades at $368, compared to BTC trading at over $42k - a fact that makes Bitcoin Cash an attractive investment among crypto enthusiasts.
Have you considered investing in Bitcoin Cash?
The Pros of Investing in Bitcoin Cash
From its very creation, it’s clear that Bitcoin Cash has stirred up the cryptocurrency community.
And even though Bitcoin Cash can’t compare to its ancestor Bitcoin in terms of market cap, the truth is that there are various pros of investing in Bitcoin Cash.
So, here’s a quick look at the pros of investing in Bitcoin Cash.
✅ Bitcoin Cash Is Decentralised
Just like Bitcoin and other cryptocurrencies, Bitcoin Cash’s value lies in the fact that the network is decentralised, eliminating the need for central banks and taking monetary supply out of the hands of authorities.
With nodes being spread globally, Bitcoin Cash is also immune to political attacks, which is a major pro of BCH investing.
✅ Bitcoin Cash Is Scalable
One of Bitcoin Cash’s main advantages compared to Bitcoin is its scalability.
The team behind Bitcoin Cash was quick to implement changes and make it more scalable, which means that more people can execute transactions and payments all at the same time.
As of November 2020, Bitcoin Cash has a block size of 32 MB (as per CoinMarketCap). High scalability means that Bitcoin Cash’s future potential for adoption is also high.
✅ It Is Highly Efficient
One of the main pros of Bitcoin Cash is its high efficiency. With much larger blocks than Bitcoin, Bitcoin Cash can record more transactions in each block and make payments faster and at lower costs compared to Bitcoin.
The team behind Bitcoin Cash has put together a rough roadmap and is considering increasing block sizes once again to resolve possible scalability problems. With the current network load, the queue of unconfirmed transactions is relatively low and usually doesn’t exceed 200-250 transactions.
✅ Bitcoin Cash Has Low Transaction Costs
With the increase of the overall scalability of Bitcoin Cash, validation times and fees of the transactions decrease.
According to BitInfoCharts, the average transaction is $0.008306.
In comparison, the average transaction fee for Bitcoin is $1.79, also according to BitInfoCharts.
✅ Bitcoin Cash Is Highly Popular
Though Bitcoin is still one of the most popular coins in terms of trading volume and market cap, we can’t ignore one of the biggest pros of Bitcoin Cash investing: its popularity.
Bitcoin Cash has been popularised by many crypto gurus, including Roger Ver, sometimes known as ‘Bitcoin Jesus’ (because of his praise of Bitcoin, then later, Bitcoin Cash).
Ver promotes Bitcoin Cash as the true Bitcoin, particularly if Bitcoin continues to struggle with scalability issues and loses its dominance over other coins, and fails to achieve its goals (as digital, peer-to-peer currency).
According to Statista, Bitcoin Cash was the 11th most traded cryptocurrency, with a 24-hour trade volume of $1.32 billion in mid-2021.
Most popular cryptocurrencies by 24-hour trade volume, as of the 13th July 2021. Source: statista.com
✅ BCH Is Easy To Acquire
Bitcoin Cash’s native currency BCH is easy to acquire. It is listed on top exchanges like eToro, which drives mass adoption and enhances its investment potential in the cryptocurrency market.
The Cons of Investing in Bitcoin Cash
Though Bitcoin Cash has various advantages over Bitcoin and other cryptocurrencies. However, like any investment, putting your money into Bitcoin Cash (BCH) isn’t risk-free.
So, here’s what you should know about the risks of investing in Bitcoin Cash.
❌ Bitcoin Cash Has Low Adoption
Despite Bitcoin Cash’s popularity and potential, Bitcoin Cash has relatively low adoption. Compared to Bitcoin, Bitcoin Cash still doesn’t have much investor confidence and shows lower market penetration.
Even though Roger Ver actively promotes Bitcoin Cash, mass adoption is still low. And we all know that adoption rates are crucial to drive the growth of any cryptocurrency.
And adoption is often seen as the primary driving force behind price appreciation above all other factors. Adoption drives demand which in turn pumps up the price.
❌ Bitcoin Cash Has Branding Issues
One of the major cons of investing in Bitcoin Cash is its branding issues, which can hurt investor faith.
Bitcoin Cash is struggling to distinguish itself from Bitcoin and has also had several splits, including Bitcoin SV.
While colourful Roger Ver is trying hard to support Bitcoin Cash and its brand name recognition, the truth is that Bitcoin Cash has a long way to go.
(It also doesn’t help that whenever you google anything about Bitcoin Cash, you’ll probably also get results related to Bitcoin.)
❌ Bitcoin Cash Mining Is Less Profitable
The network’s computing complexity is a big disadvantage as it impacts the speed of how data is extracted. In fact, Bitcoin Cash mining is highly similar to Bitcoin mining.
The main difference is that Bitcoin Cash miners get less profit, which may affect their motivation to continue.
And while you don’t have to be an IT specialist or a miner to invest in Bitcoin Cash, it’s not a secret that mining affects the value of any cryptocurrency.
❌ BCH Has Lower Liquidity Than BTC
If we consider on-chain transaction volume and volatility of daily returns among other financial factors, it’s clear that Bitcoin Cash transactions are fewer than Bitcoin transactions.
This means that BCH has lower liquidity compared to BTC, with BCH pairs being traded less than BTC pairs - a drawback that may affect future prices and mass adoption.
❌ Bitcoin Cash Will Never Be As Highly Valued As Bitcoin
While Bitcoin Cash arguably does a better job at being Bitcoin than Bitcoin does in that it facilitates transactions cheaply and quickly, Bitcoin has become the digital equivalent of gold.
It was never Bitcoin’s intention to be seen as a haven asset, but it is the situation that we are now in. People who believe Bitcoin Cash will dethrone Bitcoin need to know it will probably never happen.
They don’t want to be as valued as much as Bitcoin because that will defeat its purpose, it will make it too expensive to use.
Is Bitcoin Cash a Good Investment?
Yes, Bitcoin Cash has proven to be a good investment, currently ranking seventh by market cap - a significant fact that increases its investment potential.
Though some critics do not consider Bitcoin Cash a good investment in the long term but a speculative tool in the short term, figures show that Bitcoin Cash is growing.
Given that Bitcoin Cash is one of the most prominent forks of Bitcoin, more and more investors are taking interest in this coin. BCH is a desired asset, with one BCH trading at $247.63 as of November 19th, 2020.
After all, Bitcoin Cash is an ambitious project that aims to replace Bitcoin. As Ver tweeted: “Imagine investing in #Bitcoin today, but not realizing it was always meant to be cash”.
As such, investing in Bitcoin Cash has a promising future, especially for those who believe in the future of cryptocurrency trading.
Roger Ver believed that Bitcoin Cash may even double in price in 2022. Other crypto investors also suggest that BCH may witness an upward trend and hit new highs.
Put simply, Bitcoin Cash BCH is a potentially rewarding investment. But it’s also something you should do some research on before you consider adding BCH to your portfolio.
Is Bitcoin Cash BCH a Safe Investment?
Yes, it can be assumed that investing in Bitcoin Cash is a safe investment. This is based on three factors: adoption, development, and support.
To be more precise, one of the factors that may affect Bitcoin Cash’s longevity is its practical use or user ability to pay for goods and services.
The good news is that Bitcoin Cash has real-world applications and is accepted by more than 945 online and 670 brick-and-mortar retailers, which increases its investment potential.
The other two factors that may affect Bitcoin Cash as a safe investment - an active development team and a large community of supporters - are also at a good level.
As stated above, Bitcoin Cash has an impressive media presence among Bitcoin investors, with controversial Roger Ver being an active advocate.
That being said, cryptocurrency investing is a high-risk financial venture.
Is Bitcoin Cash Investing Worth It?
Yes, investing in Bitcoin Cash can be worth it. Simply because Bitcoin Cash is the most widely adopted fork of Bitcoin that is growing in terms of market cap and trading volume!
Moreover, its developers and supporters have numerous ambitious plans for its future and scalability applications.
Though Bitcoin currently makes up more than 50% of the entire crypto industry, many investors prefer altcoin trading. Investor Brian Kelly, for example, once said that Bitcoin Cash is a ‘must-own’ crypto.
That said, although investing in Bitcoin Cash is easy and comes with numerous pros, that doesn’t mean you should invest in Bitcoin Cash.
Before you start investing in cryptocurrencies you should develop an investment strategy and decide if you are more interested in short-term trading or long-term investing.
Note that many investors consider Bitcoin virtual gold and a great asset for long-term investing, claiming that Bitcoin Cash is more suitable for short-term trading, as well as a practical way to use cryptocurrency without delays.
Check Out: Will Bitcoin Cash Make Me Rich in 10 Years?
How Much Should I Invest in Bitcoin Cash?
The general rule in the crypto investing sector is to invest only money you can afford to lose and never risk more than 1% of your account on a single trade.
You should also consider the risk-reward profile of Bitcoin Cash and develop a successful risk management strategy to reduce risks and potentially increase profits.
Due to the volatility of the market, some financial experts suggest that one should invest only up to 5% of their capital in cryptocurrency.
After all, the volatility of the cryptocurrency market is notorious. Take Bitcoin, for example. Buying a TV for $500 might have cost around 250 bitcoins a decade ago (for example, in December 2011), and just a small fraction of Bitcoin now.
Will Bitcoin Cash Be a Millionaire Maker?
With a market cap of $6,981,630,881, we can say that Bitcoin Cash is already a millionaire maker.
If you were one of the investors who had Bitcoins before it split into Bitcoin Cash in 2017, then you’d have boosted your profit by receiving Bitcoin Cash, for sure.
When a hard fork occurs, holders of the original coin who have private keys will have access to assets on both chains.
If you are thinking about investing in Bitcoin Cash now, remember there’s a high degree of risk.
If you had bought Bitcoin Cash for $75.03 on the 15th of December 2018, for example, selling them today would have delivered a profit of around $200. The goal here is to wait for prices to rise and exchange for dollars.
Though price predictions are mainly speculative due to the high volatility in the crypto market, the value of BCH may increase further in the years to come as scarcity promotes growth.
And we all know that just like Bitcoin, Bitcoin Cash has a limited supply of 21 million coins, with a currency circulating supply of 18,951,281.25 BCH.
Now you know the pros and cons of investing in Bitcoin Cash. If you’re feeling inspired enough to invest in BCH, you may be pleased to know that eToro provides the ability to invest in crypto assets, including Bitcoin Cash, and CFDs trading on over 90 cryptocurrencies.
eToro – Best Broker to Buy Bitcoin Cash BCH
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
How To Buy Bitcoin Cash?
You can buy Bitcoin Cash in four simple steps with a broker like eToro or via a cryptocurrency exchange. Here’s how you’d do it with most brokers and exchanges.
Step 1. Go to eToro’s website, click ‘Join Now’, and fill out the registration form.
Step 2. Verify your information by uploading proof of your identity and address.
Step 3. Make a deposit. The minimum deposit is $200 in most countries, $50 in the USA. Several countries require significantly higher deposits.
Step 4. Buy Bitcoin Cash by going to ‘Trade Markets’ then ‘Crypto’ then ‘BCH’, and choose your terms.
And now you have Bitcoin Cash!
How To Sell Bitcoin Cash?
Selling Bitcoin Cash is a very similar process to buying Bitcoin Cash but in reverse.
Login to your broker or crypto exchange and navigate to your open positions. Select the amount you want to sell and choose ‘sell’ (you might want to sell it all or keep some). You may want to choose your terms.
When you’re done, you can then withdraw the money or crypto you sold your Bitcoin Cash for.
Key Points
If you remember anything from Pros And Cons Of Investing In Bitcoin Cash, Will It Be A Millionaire Maker, make it these key points.
- Bitcoin Cash is a fork of Bitcoin launched in 2017. Bitcoin Cash is one of the most popular forks of Bitcoin.
- BCH was designed with larger blocks than Bitcoin. This was done to resolve Bitcoin’s scalability issues and make transactions faster and more effective.
- Bitcoin Cash has numerous pros that have convinced investors that Bitcoin Cash will go in a different direction than Bitcoin. Some of the benefits of investing in Bitcoin Cash include low transaction fees, faster times, and high scalability levels.
- Though many believe in Bitcoin Cash’s new features and roadmap, there are certain cons investors should consider. Some disadvantages of BCH include branding issues, low adoption, and high volatility.
- While Bitcoin Cash may be a millionaire-maker, one should consider the risk-reward profile of Bitcoin Cash. Then decide for themselves if investing in Bitcoin Cash is suitable for their financial goals and expertise.
Would you consider investing in Bitcoin Cash or other cryptocurrencies?
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FAQs
Still have questions on Bitcoin Cash? Perhaps these frequently asked questions will help.
Difference Between Bitcoin And Bitcoin Cash?
The biggest difference is that Bitcoin Cash has blocks 32 times larger so it can validate more transactions per block and is, therefore, cheaper, and faster.
Other differences include the lightning network and Segregated Witness (SegWit).
It should also be pointed out that both projects have smart contract capabilities, but they were implemented in different ways.
As the two continue to develop further, the differences will become more succinct.
What Am I Investing In Buying Bitcoin Cash?
You are buying into a truly peer-to-peer cryptocurrency that is not trying to replace gold or create a smart contract economy.
A hedge against Bitcoin. That the changes that Bitcoin made after the split with Bitcoin Cash were wrong and that Bitcoin Cash was correct to stick to Nakamoto’s original plans.
It is also a hedge against more complex cryptocurrencies like Ethereum, whose vast plans might be too much...
How Many Bitcoin Cash Are Left?
2,048,718.75 according to CoinMarketCap, since 18.9 BCH are already in circulation and there is a maximum supply of 21 million.
Random fact, but there may be considerably more Bitcoin Cash out there than Bitcoin, despite both having a 21 million cap.
This is because somewhere between 3-3.8 million BTC are believed to be lost forever, according to a study by Dhruv Bansal of Unchained Capital. (1 million would belong to Satoshi Nakamoto.)
Who Owns The Most Bitcoin Cash?
According to BitInfoCharts, address 1JBHhm7Z6i5i65epVg2fA676PCE7WVQyv1 owns the most Bitcoin Cash. Approximately 879,561 BCH ($446,406,830) or 4.68% of all coins.
It’s not clear who owns the account, but from checking its transaction history, it is very active. Some have suggested that it may belong to an exchange.
Interestingly, BitInfoCharts also notes that 113 addresses own more than $10 million in BCH.
Should I Buy Bitcoin Cash Or Bitcoin?
It’s down solely to your investment goals and beliefs. Note that some of the main advantages of Bitcoin Cash over Bitcoin are its increased scalability, cheaper transactions fees, and faster processing times.
On the other hand, Bitcoin ranks first in terms of market cap and has spread name recognition. Whether you decide to buy BCH or BTC, do not forget that cryptocurrency investing is a high-risk investment.
Will Bitcoin Cash Replace Bitcoin?
No, it is unlikely that Bitcoin Cash can ever replace Bitcoin as it is extremely popular. However, Bitcoin Cash has already replaced Bitcoin in the sense that it’s much easier and cheaper to transact value.
Keeping in mind that adoption is the key to success in cryptocurrency, Bitcoin Cash is still very far behind Bitcoin.
Active Bitcoin and Bitcoin Cash addresses. Source: bitinfocharts.com
Should I Buy Bitcoin Cash Or Bitcoin SV?
Choosing between Bitcoin Cash and Bitcoin SV is a choice of two competing ideologies. Bitcoin Cash, for now, is much more popular and is accepted by far more merchants and services.
Because of this, BCH has more potential to make a profit in the near future.
However, you may wish to buy Bitcoin SV if you’re a hardcore believer of Satoshi Nakamoto (or at least what you think he believes).
Do note that some traders would prefer to keep away from Bitcoin SV because of its association with Craig Wright who claims to be Satoshi Nakamoto.
Why Is Bitcoin Cash So Low?
Bitcoin Cash has indeed slipped from grace over the last few years, slowly exiting from the top 10 cryptos by market cap.
People have lost some interest in Bitcoin Cash, and it’s not so much that Bitcoin cash is low, but that other, newer cryptos have appeared and grown much faster.
As the DeFi market becomes an increasingly important part of the crypto market, transactional cryptos (including Litecoin and Dash too) are seen as less interesting.
And this lack of interest is clear in BCH’s performance in the 2021 bull run. It almost reached $1,600 in May, which is far below its all-time high of $4,355.62 in 2017.
Will Bitcoin Cash Go Up?
Bitcoin Cash could probably go up again in 2021 as some believe we are currently in a mid-market cycle and the bull run could continue before the year ends.
With Bitcoin Cash, one of the key things to watch is upgrades as the projects continues to add new features and enhancements.
According to their ‘unofficial’ roadmap, increasing adoption is one of their priorities. And as we know, adoption is very important for boosting prices.
While they don’t specify how they will increase adoption, they do have a long list of entities that plan to focus on that.
There is even the possibility that the teams behind Bitcoin Cash may further enlarge their blocks to validate more transactions.
With the creation of ‘Scalenet’, they plan to stress test BCH blocks, with a default size of 256.
Other potential upgrades include ‘double-spend proofs’, which could solve 99% of double-spend issues, faster transaction propagation, and increased chain-transaction limit, among other things.
Does Bitcoin Cash Have A Future?
Bitcoin Cash has barely scratched the surface of its capabilities. You must remember that cryptocurrency is still very young, and adoption is slowly catching up.
And when it does, Bitcoin Cash will be one of the most practical cryptos to use.
Furthermore, though Bitcoin Cash is a transactional cryptocurrency, they also are beginning to dabble into DeFi.
Back in March 2021, General Protocols, a start-up company, raised $3 million to finance its DeFi project, Anyhedge, the first DeFi project on Bitcoin Cash, according to Bitcoin.com.
It may take a while for Bitcoin Cash to catch up with the other big DeFi players, but with lower transaction costs, BCH could be a great alternative.
How To Use Bitcoin Cash?
Using your Bitcoin Cash wallet, you can send BCH to others and businesses in exchange for goods or services. To do this, all you need to do is launch your wallet, select ‘send’ and enter the recipient’s address and it’s done.
It’s much easier than what banking services offer! But remember to keep your BCH in your wallet, not in an exchange!
Where Can Bitcoin Cash Be Used?
According to data shown on map.bitcoin.com, BCH is accepted by a wide variety of merchants across the world.
In Europe, Bitcoin Cash is accepted by many in Slovenia, Croatia, Switzerland, and Bulgaria.
In Africa, Nigeria has the highest number of BCH merchants and is then followed by South Africa.
In North America, BCH is most accepted in the USA, where there are thousands of BCH merchants - the most in any part of the world. Interestingly, many merchants also accept BCH in Antigua.
In South America, Venezuela leads the way, followed by Argentina.
And in Asia, BCH has a significant number of merchants in Hong Kong, Japan, India, and Thailand. Elsewhere, there are many merchants in Australia too.
How To Mine Bitcoin Cash?
According to Cointelegraph, you’ll need to consider the following before you start mining Bitcoin Cash:
- You should know how much you stand to make and how much it will cost to set up a mining rig.
- You will need a Bitcoin Cash wallet and ideally should have a backup wallet to keep your funds safe.
- You’ll also have to consider if you’ll join a mining pool or mine alone.
- You’ll need mining software to control and monitor your rig.
- Choose the right mining hardware.