Why Is Bitcoin Cash So Cheap?

Last Updated January 11th 2022

7 Min Read

One of the most common questions we get asked by our readers is; Why is Bitcoin Cash so cheap? Well, today, we'll try to answer that question once and for all.

First, you have to understand that the Bitcoin Cash market has not yet reached maturity. It's a new altcoin that was only created in August 2017.

Since then, the whole cryptocurrency market has been experiencing a series of bearish periods, and this is why we see these huge price fluctuations for all of the cryptocurrencies.

Secondly, there's currently little to no use for Bitcoin Cash on the retail level because most companies are yet to integrate it as a payment option. It has great potential as a currency, but at the moment, it is just a store of value and speculative asset, as most of the other cryptocurrencies.

Let's take a moment to remember what Bitcoin Cash actually is: As mentioned before, it's a hard fork from the original Bitcoin and was created in August 2017 by a team of developers who aimed to increase scalability and decrease transaction fees - among other things.

Thirdly, the Bitcoin Cash market is extremely small compared to other altcoins. The total market cap of all Bitcoin Cash in circulation is only $6 billion at the moment, which is nothing when you compare it to other bigger coins like Ethereum ($370,427,375,781) and Bitcoin ($795,160,245,389).

What Is Bitcoin Cash (BCH)?

By now, many of you are probably aware that during the hard fork in August 2017, a new cryptocurrency was created called Bitcoin Cash. But what exactly is this?

Bitcoin Cash is meant to be identical to Bitcoin in every way - except for the fact that it's much faster and the transaction fees are lower.

The more people use Bitcoin, the slower it becomes; and we are talking about millions of people right now. The intent of Bitcoin Cash is to increase the size of each block (the name for a group of transactions that are processed at once), allowing more transactions to be processed and thus speeding up transaction times and lowering costs.

The fact that Bitcoin Cash has no real purpose behind its existence makes it an extremely volatile cryptocurrency - just like the original Bitcoin. It's pure speculation that this cryptocurrency will be worth anything in the future, but many experts believe that it has the potential to become a lot bigger than its big brother.

And although Bitcoin Cash is a "copy-paste" of Bitcoin with a few modifications, it has not been able to replicate Bitcoin's parabolic growth.

So, why has its price remained so low despite it being better than Bitcoin in terms of scalability and transactions fees?

We will be answering that question in more detail below. But first, let's look at BCH price history in order to understand why its price has remained relatively low.

Bitcoin Cash Price History

If we take a closer look at the price history of Bitcoin Cash since August 2017, we see that it has experienced two major surges in price - one in December 2017 and one in March 2021.

But what happened before these surges? Well, back in August 2017, the price of Bitcoin Cash was only $298. It has experienced a very volatile price movement since, with the highest recorded price being $4355.62 in December 2017 and the lowest being $75.03 back in December 2018.

This volatility is due to the fact that many people see it as a speculative asset - much like Bitcoin - and a potential money-maker.

Investors also see it as an extremely risky investment, which leads to them selling it when the price starts going down - prompting even further price drops.

And this is what has been happening on a regular basis since August 2017: Whenever the price of BCH goes up, most people sell it since they assume that the price is going to drop again.

And when the price drops, people who bought a lot of it decide to sell as well in order to avoid further losses. This causes even more people to dump BCH at a loss - just like we have seen with Bitcoin recently.

Unfortunately, the price of BCH is still too low to attract serious investors or corporations - which means that it will continue its journey down until it becomes more profitable for large-scale investors.

This will not happen anytime soon because even if the price of Bitcoin Cash drops for years on end, there are still many people who believe in the potential of this cryptocurrency.

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

So, Why Is Bitcoin Cash So Cheap?

As we mentioned before, one of the main reasons why Bitcoin Cash has been extra volatile is its speculative nature. There are many people who want to make a quick buck off this type of volatility - which means that whenever the price drops, they start dumping their BCH in droves.

Unfortunately, we can't do anything about this type of behaviour, and the only way out is through a price surge - which will entice more investors to pump huge amounts of money into BCH.

This is one of the main reasons why some people compare Bitcoin Cash with Ethereum, as it's also purely speculative. Many people see it as a way to make money - much like investing in the stock market.

But the main difference between BCH and ETH is that Ethereum can actually be used for its initial purpose (smart contracts) while BCH has no real purpose or functionality.

This means that even if Bitcoin Cash drops to $100, its price will not go up anytime soon since there is no incentive for people to invest in it.

This is why the price of Bitcoin Cash has remained relatively low despite BCH being a 'remake' of one of the most successful cryptocurrencies. Of course, there are other reasons why BCH is so cheap.

Bitcoin Cash has been unable to replicate Bitcoin's parabolic growth because even though it is better than BTC in various ways, many people are already involved with BTC and are not willing to make the switch. This means that they will continue using BTC due to their familiarity.

It's kind of like if someone creates a replica of Facebook and makes it a little better, the users of Facebook will probably not switch over to it due to their loyalty towards Facebook.

Check Out: Is Bitcoin Cash Worth Buying

Is Bitcoin Cash A Good Investment Despite Its Low Price?

We're not financial experts, but we believe that Bitcoin Cash can be better than other cryptocurrencies in various ways.

One of the main reasons why Bitcoin Cash is currently so cheap is because of its low usability and liquidity - which means that if more people use it, its price will go up accordingly.

For this to happen, there needs to be a big shift in the way people see BCH right now because most of them consider it to be a speculative asset.

But should you invest in it anyway?

The fact that Bitcoin Cash (BCH) is cheap can be either positive or negative depending on your point of view - but if you ask us, we think that BCH has huge potential despite its low price.

Bitcoin Cash is still very cheap, and that means that there is room for growth - which is what you should be looking for when you invest in cryptocurrencies. Just keep in mind that if the price of BCH goes up, most people will sell it quickly since they assume that the price will go down again.

Conclusion: Will The Price Of BCH Go Up?

We believe that the price of BCH could go up in the future, but not anytime soon. In order for this to happen, there need to be huge changes in the way people see and use Bitcoin Cash.

This means that if you want to make a significant amount of money with BCH, you should invest in it gradually over time instead of making a huge one-time purchase.

If you leave your money with BCH for a long period of time (more than 5 years), the chances are that it will go up significantly - but even if its price doesn't go up drastically by then, you probably won't lose any significant amount of money either.