Bitcoin Cash (BCH)’s price seems to be going through a stagnant phase. The crypto coin hasn’t seen much of a rise in the past one month. The coin which is a result of a hard fork of the Bitcoin Blockchain has experienced a lot of price fluctuations. But why is the price so volatile, especially considering that BCH is one of the most prominent Bitcoin hard forks!
Development-wise, the cryptocurrency does have a lot of good things going for it. Recently, Ripple partner, SBI holdings announced their intention to invest more into Bitcoin Cash. Developers of the BCH network have also announced the timeline for the next network upgrade. But they haven’t yet specified what features the upgrade will include.
According to a report by Cryptovest, when the cryptocurrency first appeared on Coinbase, its price had shot up to $3500. But, it didn’t stay that high for long and the price fell down to below $1000. It did see a ray of light in April with prices reaching almost $1700. But the bearish downtrend in the market put paid to that and it’s been a continuous slump after that.
BCH is currently trading at $698.49, which is around 0.109 BTC and has dropped down by 4.58% since yesterday. But, why hasn’t BCH been able to move past this price? Let’s look at a few reasons which could be affecting the price of the cryptocurrency.
Mining Bitcoin Cash isn’t as profitable as mining its parent cryptocurrency, Bitcoin (BTC). According to the report, even when BCH mining became more profitable, the margin between the two wasn’t very big. The prevalence of Bitmain pools which facilitate BCH mining could be a plausible reason. When compared to several other alternatives, Bitmain Pools offer lower levels of profitability. Moreover, miners will not focus their attention on Bitcoin Cash if there’s little to be gained from mining the coin.
Fewer BTC-BCH Direct Trades
When BCH was first introduced, investors generally traded Bitcoin to Bitcoin Cash directly. This helped establish trust in one network or the other. But with the frequency of direct trades between the two coins decreasing, the price has been affected. The reason behind fewer direct trades could be Tether (USDT).
The fiat token’s price doesn’t fluctuate, so investors who trade against USDT have an advantage. The intermediary token ensures that investors can bide their time even if the market is volatile. This is one of the main reasons that currently, USDT trades 75% more than Bitcoin Cash.
Bitcoin Cash is an Altcoin
BCH’s parent coin is the world’s first cryptocurrency. And any other digital currency that came after Bitcoin is called an Altcoin. While these coins project themselves as better versions of Bitcoin, they’re still a risky investment. One of the main reason is the price volatility. None of the altcoins in the market has been able to reach or surpass Bitcoin’s price in the crypto market.
And then there’s Bitcoin’s popularity to contend with too. Moreover, BTC’s influence over the price of other cryptos is very well known. This will definitely affect the cryptocurrency’s prices.
But, all is not lost for BCH. The cryptocurrency company has been working at forming several partnerships and increasing the coin’s adoption as well. And furthermore, several organizations which accept BCH are now moving towards 0 confirmation transactions as well. With more adoption comes better visibility, which in turn will lead to greater demand and drive up the prices for BCH. So, the crypto does have a good chance of rising up.
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