Bitcoin Cash (BCH) - Analysis & Future Price Predictions

OVERVIEW:

Bitcoin Cash (BCH) is a digital currency introduced to reinforce decentralization in the cryptocurrency space and improve upon the current code used by Bitcoin. Bitcoin Cash emerged from a "hard fork" of Bitcoin in 2017, a process where the original blockchain divides into two distinct chains.

Compared to Bitcoin, Bitcoin Cash can process more transactions within a single block, aiming to reduce both fees and transaction durations.

Key features of Bitcoin Cash (BCH):

Bitcoin Cash (BCH) has several key features that distinguish it from other cryptocurrencies, especially from its predecessor, Bitcoin (BTC).

Here are the primary features of Bitcoin Cash:

• Increased Block Size: One of the most notable features of Bitcoin Cash is its increased block size. Initially set at 8 megabytes (compared to Bitcoin's 1 megabyte), this larger block size allows for more transactions per block, aiming to improve transaction speeds and reduce fees.
• Scalability: With its larger block size, Bitcoin Cash was designed to address the scalability issues faced by Bitcoin, allowing for faster transaction processing and aiming to handle a higher volume of transactions.
• Decentralization: Bitcoin Cash proponents emphasize the importance of keeping the cryptocurrency decentralized, ensuring that it remains accessible to regular users and not just large-scale mining operations.
• Difficulty Adjustment Algorithm (DAA): Bitcoin Cash has a unique difficulty adjustment algorithm that adjusts the mining difficulty based on the amount of mining power on the network. This ensures more consistent block generation times.
• Low Transaction Fees: Due to its increased block size and scalability solutions, Bitcoin Cash typically offers lower transaction fees compared to Bitcoin, making it more suitable for daily transactions.
• Reactive to Community Needs: Bitcoin Cash has shown a willingness to implement changes based on community feedback, as seen with its various updates and forks since its inception.
• Secure: Like Bitcoin, Bitcoin Cash operates on a proof-of-work algorithm, ensuring the security and integrity of transactions on its blockchain.
• Commitment to Development: The Bitcoin Cash community is active in its development, with regular updates and improvements to its protocol to address issues and enhance its features.
• Widespread Adoption: Bitcoin Cash is accepted by a variety of merchants and online platforms as a payment method and is supported by numerous cryptocurrency wallets and exchanges.
• Replay and Wipeout Protection: After the split from Bitcoin, Bitcoin Cash introduced replay and wipeout protection to ensure that transactions on one chain do not affect the other, providing security to its users.

Bitcoin Cash was developed to address some of the challenges faced by Bitcoin, especially in terms of scalability and transaction fees. Its features reflect its commitment to providing a practical and efficient medium of exchange for everyday transactions.

1. Highly Reactive to Bitcoin ETF News and Announcements

In June of this year when Blackrock announced they would be filing a Bitcoin ETF, the cryptocurrency market pumped, including Bitcoin exceeding $30,000.

However, it was Bitcoin Cash that experienced the highest gains - +300% in just a matter of days, following the news. Why did Bitcoin Cash pump so much from this news?

Just this week, GrayScale won in a federal appeals court in favor of its plan to transform its Bitcoin Trust into an ETF. The market responded positively to the news and Bitcoin Cash pumped another 20% on the news.

According to Bloomberg ETF analysts Eric Balchunas and James Seyffart they have raised their odds of a spot Bitcoin ETF approval by the SEC to 75% by the end of this year, and 95% by the end of 2024.

According to Grayscale’s legal head, he says bitcoin spot ETF approval is a ‘matter of when, not if’.

I would agree, a Bitcoin ETF will happen - it's just a question of when.

Numerous companies have made attempts in the past to develop a Bitcoin ETF, but so far, none have been successfully established or approved by the authorities in the United States.

Some of the largest institutions in the world are applying for Bitcoin ETFs, and this includes Blackrock, Fidelity Investments, ARK Invests, Bitwise, Investco, and more.

Once a Bitcoin ETF is approved in the US market, this will likely be a watershed moment for the crypto industry and could shift the current market cycle into the run-up phase.

I anticipate, one of the biggest gainers from this news, as we have already seen in the past, to be Bitcoin Cash and the reason is due to institutional adoption (see point #3 below).

2. Upcoming Network Upgrade

It is also important to note that Bitcoin Cash is scheduled to undergo a network upgrade in the next few months, on November 15, 2023. This upgrade is expected to bring several improvements to the network, including increased transaction capacity and enhanced security measures.

These enhancements aim to further bolster Bitcoin Cash’s position as a viable and robust cryptocurrency. Typically a significant price increase follows a successful network upgrade.

3. Bitcoin Cash - The next Bitcoin?

The third reason is institutional investment. Institutional investment is largely restricted to a handful of cryptocurrencies, Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

On a regulatory front, Canada has put into place maximum limits for the value of crypto individuals can purchase. However, there are four cryptocurrencies excepted from this regulation: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

Bitcoin Cash - Mass Institutional Adoption

Bitcoin Cash (BCH) is always one of the top-4 selections for financial institutions

• EDX: (BCH — BTC — ETH — ETC)
• JPMorgan Chase & Co. (USA): (BCH — BTC — ETH — ETC)
• SBI Holdings (Japan): (BCH- XRP — BTC — ETH — LTC)
• 21Shares (EU): (BCH — BTC — ETH)
• Interactive Brokers (USA): (BCH — BTC — ETH — LTC)
• Bancolombia (Colombia): (BCH — BTC — ETH — LTC)
• US Bank (US): (BCH — BTC — LTC)
• Grayscale (BCHG)

On the American front, U.S. Bank — the fifth-largest bank in the country — announced that it will offer custody services for specific cryptos - Bitcoin, Litecoin, and Bitcoin Cash.

Then there is Grayscale, heavily investing in Bitcoin Cash (BCH) and even offering Grayscale® Bitcoin Cash Trust

Recently, there is also EDX, a new institutional market for cryptocurrency investing, which was recently launched by a consortium of financial institutions and private investors including Charles Schwab, Citadel Securities, and Fidelity.

The new institutional market allows the trading of just four cryptocurrencies:

• Bitcoin (BTC)
• Bitcoin Cash (BCH)
• Ethereum (ETH)
• Litecoin (LTC)

These four cryptocurrencies are also those that SEC’s chair, Gary Gensler, had named as non-securities in a 2018 MIT presentation.

4. Bitcoin Cash Halving

Finally, in April 2024, we expect the 4th halving for Bitcoin (BTC) and for Bitcoin Cash (BCH).

Conclusion

Bitcoin Cash's responsiveness to Bitcoin ETF news (most likely due to institutional investors), its upcoming network upgrade, its increasing recognition and investment from major institutions, and its upcoming halving indicate its potential for significant price appreciation in the upcoming months.

What is Bitcoin Cash (BCH)?

Bitcoin Cash (BCH) is a cryptocurrency that originated as a result of a hard fork from Bitcoin (BTC) in 2017.

Here's a brief overview:

• Origin: Due to disagreements within the Bitcoin community about addressing scalability issues, a segment of the community decided to create a new version of Bitcoin with different rules. This led to a "hard fork" on August 1, 2017, resulting in two separate blockchains: Bitcoin (BTC) and Bitcoin Cash (BCH).

Key Differences from Bitcoin:

• Block Size: One of the primary distinctions between Bitcoin and Bitcoin Cash is the block size. Bitcoin Cash increased its block size limit, initially to 8MB and later to 32MB, allowing for more transactions to be processed per block. This was done to reduce transaction fees and wait times.
• Adjustment Algorithm: Bitcoin Cash implemented a different algorithm to adjust the difficulty level of mining, ensuring more regular block discovery even with fluctuating levels of mining power.
• Purpose: Bitcoin Cash aims to be a peer-to-peer electronic cash system, emphasizing its utility as a medium of exchange for everyday transactions, rather than just a store of value.
• Decentralization: Like Bitcoin, Bitcoin Cash operates on a decentralized network of computers. No central authority or institution controls the Bitcoin Cash network.
• Security: Bitcoin Cash uses the same proof-of-work consensus mechanism as Bitcoin, where miners use computational power to validate and add new transactions to the blockchain. This ensures the security and integrity of transactions.
• Development: Bitcoin Cash has multiple independent development teams providing software implementations, ensuring that no single group can control its protocol development.
• Adoption: Over the years, Bitcoin Cash has gained acceptance among various merchants and service providers, both online and offline, as a means of payment.

In summary, Bitcoin Cash is a cryptocurrency designed to offer faster and cheaper transactions compared to Bitcoin. It emerged from disagreements within the Bitcoin community about scalability solutions and has since established itself as one of the major cryptocurrencies in the market.

Primary Use Case:

One of the primary distinctions between Bitcoin Cash and Bitcoin is that Bitcoin Cash allows for larger blocks in its blockchain, which theoretically enables it to process more transactions per second.

The Bitcoin Cash faction emphasizes the use of its currency as a medium of exchange for commerce, while many in the original Bitcoin community typically view Bitcoin primarily as a store of value.

However, it should be noted that this distinction in vision and use case has been a significant point of contention between the two communities.

Challenges to Adoption

Bitcoin Cash (BCH) has faced several challenges in its quest for widespread adoption. Some of these challenges include:

• Network Effect of Bitcoin (BTC): Bitcoin, being the original cryptocurrency, has a significant first-mover advantage. Most people new to the crypto space first learn about Bitcoin, making it more recognized and widely adopted. This network effect poses a challenge for BCH to establish its own distinct identity and user base.
• Confusion with Bitcoin: Due to the similarity in names and shared history, there's often confusion between Bitcoin (BTC) and Bitcoin Cash (BCH). This can lead to accidental transactions between the two networks or misconceptions about the distinct goals and features of each.
• Scalability Concerns: While BCH increased its block size to address scalability issues initially, there are concerns about the long-term viability of this approach. Larger blocks might lead to centralization as only well-resourced nodes could process and store the blockchain.
• Internal Conflicts: The Bitcoin Cash community has experienced internal disagreements, leading to further forks like Bitcoin SV. Such conflicts can deter new users or investors who might see the community as fragmented or unstable.
• Reputation and Media Coverage: BCH has faced criticism and negative media coverage, especially during and after its split from Bitcoin. This can affect public perception and willingness to adopt or invest in BCH.
• Regulatory Uncertainty: Like other cryptocurrencies, BCH faces challenges from regulatory bodies in various countries. Regulatory crackdowns or unfavorable policies can hinder adoption rates.
• Competition: The cryptocurrency space is highly competitive, with many coins and tokens vying for user adoption. Some of these offer features that might be seen as superior or more innovative than what BCH offers.
• Security Concerns: While the BCH network is secure, the broader crypto space has seen hacks, scams, and fraud. Such incidents, even if they don't directly involve BCH, can make potential users wary of adopting any cryptocurrency.
• Volatility: The price of BCH, like other cryptocurrencies, can be highly volatile. This volatility can deter individuals and businesses from holding and using BCH for daily transactions.
• Merchant Adoption: For BCH to be widely adopted, a significant number of merchants need to accept it as a form of payment. Convincing merchants to adopt BCH over or alongside other payment methods remains a challenge.
• Infrastructure and Development: Continuous development and infrastructure improvements are crucial for BCH's growth. Delays or issues in development can hinder its adoption.

While Bitcoin Cash faces these challenges, it's worth noting that the community and developers continue to work towards solutions, enhancements, and strategies to promote its adoption and address these issues.

Technology:

How is Bitcoin Cash (BCH) Used?

Bitcoin Cash (BCH) operates on the principles of blockchain technology, similar to Bitcoin (BTC).

Here's a breakdown of how it works and how it's used:

How Bitcoin Cash Works:

• Blockchain Technology: Bitcoin Cash operates on a decentralized ledger called the blockchain. This ledger records all BCH transactions in "blocks." Once a block is full of transactions, it's added to the chain in a linear, chronological order.
• Proof-of-Work: Like Bitcoin, Bitcoin Cash uses a proof-of-work (PoW) consensus mechanism. Miners use computational power to solve complex mathematical problems. The first to solve the problem gets to add a new block to the blockchain and is rewarded with newly minted BCH.
• Decentralization: No central authority or institution controls the Bitcoin Cash network. Instead, transactions are verified by a decentralized network of computers (nodes).
• Increased Block Size: One of the primary distinctions between Bitcoin and Bitcoin Cash is the block size. Bitcoin Cash increased its block size limit, allowing for more transactions to be processed per block. This was done to address scalability issues and reduce transaction fees and wait times.
• Security: Cryptography ensures the security and integrity of transactions. Each transaction is signed with a private key, and anyone can verify the transaction using the corresponding public key.

How Bitcoin Cash is Used:

• Peer-to-Peer Transactions: BCH can be sent or received without the need for intermediaries, directly from one person to another, anywhere in the world.
• Low-Cost Transactions: Due to its increased block size, BCH typically offers lower transaction fees compared to BTC, making it suitable for both large and micro-transactions.
• Online Purchases: Many online retailers and service providers accept BCH as a form of payment.
• Merchant Adoption: Physical stores in various parts of the world accept BCH. Payment processors have also integrated BCH, allowing merchants to accept the cryptocurrency easily.
• Investment: Like other cryptocurrencies, some people buy BCH as an investment, hoping its value will increase over time.
• Remittances: BCH can be used to send money across borders without the high fees or long wait times associated with traditional banking systems or money transfer services.
• Tipping and Donations: Some online platforms and services accept BCH as tips or donations.
• Token Creation: With certain protocols, users can create tokens on the BCH blockchain, which can represent assets or be used in specific applications.

Bitcoin Cash is both a digital currency and a payment network.

It offers a decentralized way to transact without intermediaries, ensuring fast, low-cost transactions. Whether for daily transactions, online purchases, investments, or other applications, and BCH is a versatile and efficient cryptocurrency solution.

Ecosystem Development

Bitcoin Cash (BCH) has developed a robust ecosystem since its inception. Here's an overview of the ecosystem development of Bitcoin Cash:

Smart Bitcoin Cash (SmartBCH)

Smart Bitcoin Cash (SmartBCH) is a sidechain compatible with EVM & Web3, designed to support DeFi applications and a growing number of decentralized exchanges and NFT projects.

This integration allows decentralized applications to run efficiently on the BCH network. SmartBCH aims to enhance the Bitcoin Cash ecosystem by offering high throughput for DApps in a secure and decentralized manner.

It also introduces innovations like MoeingADS, MoeingEVM, and MoeingDB to optimize performance. Essentially, SmartBCH bridges the gap between Bitcoin Cash and Ethereum-based applications, facilitating a seamless operation of DeFi applications on the BCH network.

Several platforms and payment processors have also integrated Bitcoin Cash for payments, such as Purse.io, BitPay, GoCrypto, and Blockonomics.

Bitcoin Cash (BCH) was created as a fork of Bitcoin on August 1st, 2017 and while there aren't any specific founders nor does it have an executive team, there are some notable individuals involved in its creation and continued development.

Here are the key individuals and groups associated with its inception and development:

• Activists and Developers: A group of Bitcoin activists and developers were among the initial proponents of Bitcoin Cash. They were dissatisfied with Bitcoin's proposed SegWit improvement plans, which were aimed at increasing Bitcoin's capacity.
• Bitmain: In June 2017, the hardware manufacturer Bitmain described the would-be hard fork with the increased block size as a "contingency plan" in case the Bitcoin community decided to fork by implementing SegWit.
• Bitcoin ABC: The first implementation of the Bitcoin Cash software was proposed under the name Bitcoin ABC at a conference in 2017.
• Roger Ver: A prominent figure in the cryptocurrency community, Roger Ver, along with others, expressed concerns in July 2017 that adopting BIP 91 (which would later activate SegWit) was more favorable to those who viewed Bitcoin as a digital investment rather than a transactional currency.
• ViaBTC: In July 2017, the mining pool ViaBTC proposed the name "Bitcoin Cash" for the new cryptocurrency.
• China-based Miners: Several miners based in China were also instrumental in pushing for the creation of Bitcoin Cash. They were among the stakeholders who were unhappy with Bitcoin's proposed SegWit improvement plans and favored increasing the block size limit.

It's important to note that while these individuals and entities played significant roles in the creation and development of Bitcoin Cash, the decentralized nature of cryptocurrencies means that many contributors and developers from around the world have been involved in its ongoing development and many of them are anonymous.

Token Economics

Circulating supply: 19.4M BCH |  Max supply: 21M BCH

The hard fork that created Bitcoin Cash took place on 1 August 2017.

Total Supply of BCH

The total supply of BCH tokens is capped at 21,000,000 while the total number of tokens currently in circulation is 19,491,738, as of August 31st, 2023.

Here are the key details about its tokenomics:

• Issuance Schedule: Initially, Bitcoin Cash had a block reward of 50 BCH, similar to Bitcoin. This reward undergoes a halving event approximately every four years, just like Bitcoin.
• Block Time: The average time taken to mine a Bitcoin Cash block is 10 minutes.
• Supply Limit: The maximum supply of Bitcoin Cash is capped at 21 million. However, the actual supply will approach, but never reach, this limit. Issuance is expected to permanently halt around the year 2140, at approximately BCH 20,999,999.9769.
• Proof-of-Work: Bitcoin Cash uses the SHA-256 hash function and employs a proof-of-work mechanism for its consensus.
• Difficulty Adjustment Algorithm (DAA): Both Bitcoin and Bitcoin Cash aim for a block generation time of ten minutes on average. To maintain this, they adjust the mining difficulty. Originally, both used the same algorithm, adjusting every 2016 blocks. However, post its inception, Bitcoin Cash introduced an Emergency Difficulty Adjustment (EDA) algorithm. This was designed to reduce the mining difficulty by 20% if more than 12 hours passed between the mining of six consecutive blocks. Due to instabilities caused by EDA, it was later replaced, and as of 13 November 2017, Bitcoin Cash's DAA adjusts the mining difficulty after each block using a moving window of the last 144 blocks.

It's important to note that Bitcoin Cash underwent further splits, resulting in the creation of other cryptocurrencies like Bitcoin SV.

Token Performance

Bitcoin Cash has increased over 70% in the last two months, primarily due to the announcement of the Bitcoin ETF.

At the time of writing (August 31st, 2023), the price of BCH is at $206, with a market capitalization of $4B (USD).

Price since ATH

Bitcoin Cash's (BCH) all-time high was $4,355 (6 years ago) and it is trading at -95% of this price, at $206.

Last 365 Days

As can be seen, by the chart, the price of Bitcoin Cash was relatively flat until the announcement of the Bitcoin ETF, which increased by +300% in just a matter of days - increasing more than any other cryptocurrency from this news.

Current Price & History

(The chart above is only viewable via the website)

Should You Invest in Bitcoin Cash (BCH) Now?

The indicator below is provided by Trading View and is an algorithm that includes many commonly used technical indicators such as trendlines, moving averages, and momentum indicators, aggregated into an all-in-one "Buy or Sell" indicator for this project.

There will be a pullback in the price of BCH from the date this article is published and if you are looking to purchase it, it is advisable to wait until the price bottoms out. The indicator below can help to identify the optimal time to buy in.

This is the current buy/sell sentiment based on technical indicators:

(The indicator above is only viewable via the website)

Where to Buy:

Bitcoin Cash (BCH) can be purchased on the following exchanges:

• Binance
• Coinbase
• KuCoin
• Kraken

How to Store Bitcoin Cash (BCH)

Bitcoin Cash (BCH) is widely supported by all the popular hardware and software wallets, for a full list, see the wallet page of their website.

Hardware Wallets

Both Trezor and Ledger support Bitcoin Cash (BCH)

Project Links

• Website: https://bch.info/en/, https://bitcoincash.org/
• Twitter:  N/A
• Reddit: https://www.reddit.com/r/Bitcoincash/  (99k members)
• GitHub: https://gitlab.com/bitcoin-cash-node/
• Whitepaper: https://bch.info/bitcoin.pdf

Final Grade:

A- (85%)

The project has excellent fundamentals and early-stage adoption.

The future outlook for market adoption is excellent and the technology utilized is relevant to the market. The project has already shown signs of early-stage adoption. The project has a strong executive team, core developers, and a history of achieving its strategic objectives.

While adoption at scale has not yet occurred, it has had a strong track record of achieving its milestones. The risk associated with the attainment of future milestones is low.

While there still are factors present and mitigating factors inherent in future growth, at present the path toward full-scale adoption is considered to be low risk.

Click on these links to learn more about our framework for evaluating cryptocurrency projects and our grading methodology.

Conclusion

Many investors consider Bitcoin Cash (BCH) to be a promising investment for several reasons. First, it was created as a solution to the scalability issues faced by Bitcoin, offering faster and cheaper transactions.

This makes it more practical for everyday use and microtransactions, potentially increasing its adoption rate. Second, as a fork of Bitcoin, Bitcoin Cash has inherited the robust security features and decentralized nature of its predecessor, ensuring that transactions are secure and resistant to censorship.

Furthermore, BCH has garnered support from a significant portion of the cryptocurrency community, including prominent developers and businesses, which can drive further innovation and integration.

Bitcoin Cash has also recently experienced a surge in price and trading volume, attracting increased interest from institutional traders and exchanges. The upcoming network upgrade holds the promise of significant improvements, further strengthening the network’s capacity and security and likely resulting in price appreciation.

Bitcoin Cash offers to be a solid 'blue-chip' crypto investment to help diversify your portfolio.