Making incredibly large returns on an investment is one of the best feelings ever. It is a common conclusion whether you support hodling or retail trading cryptocurrencies and even those against cryptocurrencies would agree that a 5X or more ROI is a solid win especially if it happens within a short time frame. Bitcoin might not be in a position to deliver such gains at least not in the short-term but Bitcoin Cash might be a better-suited candidate.
Almost everyone investing in cryptocurrencies knows that Bitcoin’s dominance over the cryptocurrency market creates a direct correlation with price movements in the altcoin market. Right now there is an overwhelming opinion that Bitcoin will regain the bullish trajectory that sent it to its all-time high of $64,000 in May 2021. Some believe that it will reach $100,000 and potentially even higher but it will be a 3X move.
Bitcoin Cash (BCH) exists as a fork of the original Bitcoin network and it was created to overcome block limitations. That is why its initial block size increased to 8MB compared to 1MB for the main Bitcoin network. This change was made to facilitate a higher transaction throughput. However, there are far more important considerations as far as price performance is concerned. For starters, both cryptocurrencies have a circulating supply of just over 18 million coins.
Both coins have the same level of scarcity but BTC’s price is significantly higher, currently at $32,178 while BCH is currently trading at $432. The difference is because Bitcoin has so far garnered a huge level of adoption compared to BCH. In case of another major bull market, an increase in market cap will push up the price of BTC but a similar increase will result in a substantially higher price gain for BCH.
Source: Binance
A price analysis of BCH reveals that its price peak in the May 2021 bull run at $1,569 is almost four times its current price tag. However, if going beyond previous all-time highs is the goal, then Bitcoin Cash’s price target for the next bull run should be above$3,900. If another strong bull run were to take place pushing the price of Bitcoin to $100,000, then it is likely that Bitcoin Cash would also test the previous all-time high which means it will be closer to a 10X gain.
It is difficult to say for sure where BCH will be in the next few years given the high levels of market uncertainty. However, it would be wise for anyone who wants to benefit from the next bull market to buy some BCH even if they will purchase BTC. The only limitation holding back Bitcoin Cash from achieving such gains is adoption. Bitcoin managed to attain its currently high price tag thanks to its popularity, which is largely due to its first-mover advantage.
Bitcoin Cash lacks such a strong backing but it shares many other similarities with Bitcoin, which highlights its potential. For example, if Bitcoin is a store of wealth, then BCH should be too and it also has some advantages over BTC. Its network upgrades have so far enabled faster transactions and introduced smart contract support, thus expanding the scope of usability. Its market cap is expected to continue growing as more people realize the benefits and potential that it has to offer. BCH’s low price tag is currently an advantage for those who want to enjoy its potential gains in the future.
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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