The last two weeks have been quite interesting for the cryptocurrency market and particularly for Bitcoin Cash (BCH) because it reached its lowest point since January 2021, before jumping back up to price levels it registered towards the end of June.
BCH bottomed out at $383 on July 20 before a massive price reversal that sent it back above $500. It is currently trading at $526 after registering an 18% rally in the last 7 days, making it one of the top-performing cryptocurrencies in the top 50 list. BCH mainly owes its recovery to the ongoing bullishness in the crypto market.
Source: Binance
BCH’s performance reflects the slight increase in buying volume in the last few days and it also reflects Bitcoin’s price action. It is also good news because it highlights that the coin is still receiving a lot of interest despite the influx of new altcoins that have taken away from its potential market cap. Speaking of, Bitcoin Cash still has a relatively low market cap of $9.8 billion compared to Bitcoin’s current market cap of $727 billion, thus explaining the huge price difference. The two coins have almost the same amount of coins in circulation.
One could argue that Bitcoin Cash is a more attractive investment compared to Bitcoin which already has a high price tag. However, the latter is more popular while the former is not so much, as indicated by its market cap. The BCH community has been hoping for more adoption for transaction usage courtesy of its higher block size at 32 megabytes compared to Bitcoin’s 8-megabyte block size. However, the cryptocurrency has not seen a lot of transaction use and is instead largely used for speculative investment just like Bitcoin.
As far as speculative use is concerned, Bitcoin Cash is still relatively discounted compared to its all-time high just above $3,200 which it achieved at the height of the 2017 cryptocurrency market bull run. It is also trading significantly lower than its 2021 high of $1,650. Its current price tag is still a good entry point assuming that the bull run will continue and potentially test the aforementioned previous highs.
The cryptocurrency market is just as volatile and as unpredictable as the stock or forex markets. Accurately predicting a cryptocurrency’s future especially in the long-term is thus not possible. However, if history is anything to go by, then it is safe to say that another major crypto bull run will certainly allow Bitcoin Cash to ride the bulls. This is because it is still one of the top and original cryptocurrencies, which means investors are bound to see its potential and subsequently invest in it.
One of the reasons why Bitcoin is bound to attract investment during a bull market is its low circulating supply of just over 18 million coins. It makes sense that its price will be influenced by an increase in market cap since its price action is affected by supply and demand forces just like all the other cryptocurrencies.
Bitcoin Cash’s hashing power might improve thanks to Ethereum 2.0 which marks Ethereum’s transition to a proof-of-stake consensus mechanism. Some of Ethereum’s miners will eventually shift to mining other proof of work coins such as BCH, boosting its hash rate, and subsequently making it less susceptible to 51% attacks. This will make it more secure, thus more appealing to investors looking to take advantage of its potential in a possible future where it will register new all-time highs.
Sydney has 20+ years commercial experience and has spent the last 10 years working in the online marketing arena and was the CMO for a large FX brokerage.
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