Explaining cryptocurrencies: What is Bitcoin Cash?
Bitcoin Cash is a newer, more user-friendly version of Bitcoin.
It has been available since 2017 and is the third most valuable cryptocurrency worldwide in terms of market capitalisation.
Bitcoin Cash grew out of user dissatisfaction with how Bitcoin processes transactions.
Bitcoin blockchain blocks are restricted to 1MB in volume, which means slower transaction processing. Bitcoin Cash forked off the main chain in 2017, creating a new chain of 32MB blocks. This means more transactions can be processed for improved scalability.
Like Bitcoin, Bitcoin Cash can be used as digital payment to pay online for goods and services. Additionally, it is also capped at 21 million, meaning only 21m Bitcoin Cash coins can ever be mined. This tight supply is partly what gives Bitcoin Cash its value.
Bitcoin Cash has also had its own internal split. The crypto underwent a fork in November 2018 and split into Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision). Bitcoin Cash ABC is referred to as Bitcoin Cash now and is the crypto referred to in this article.
Bitcoin Cash valuations
Bitcoin Cash has been subject to the same price volatility other cryptos have experienced in the past. When it was first announced, Bitcoin Cash was priced at $900 – impressive for a newly minted crypto.
Since then, it has broken over $4,300.
At the time of writing, however, Bitcoin Cash was trading at $479. However, some investors and commentators are confident Bitcoin Cash can hit $2,000 in 2021.
That would make it rival ether as the second most valuable per-unit cryptocurrency on the market, Ethereum.
But caution is advised.
Unlike many other cryptocurrencies, Bitcoin Cash is still relatively centralised and subject to how its developers wish it to proceed. Investors may not be comfortable with the potential lack of transparency that other cryptos offer compared against Bitcoin Cash.
That said, Bitcoin Cash still has great potential as a tradeable commodity.
How is Bitcoin Cash traded?
Bitcoins are sold via exchanges for investors looking to purchase the coins. Bitfinex is the US’ largest Bitcoin exchange with Coinbase and Kraken other popular exchanges.
More and more traders are turning to derivatives to trade Bitcoin Cash, using products like CFDs and futures. These are available to trade via Marketsx – but please be aware trading any CFDs or assets contains risk of capital loss. Only trade if you can afford any potential losses.