Why BCH will not crash

The crypto market has been in a terrible state the past month. Many altcoins are being considered toxic to hold, and those that remain live on Tether hooks are waiting for the next major boom or bust. Since the LUNA crash happened fear of uncertainty (FUD) has increased which has set many people in panic selling their coins. Over the past week, several incidences of exchanges closing or preventing deposits and withdrawals have become the norm. Some crypto lending platforms were largely hit with the free fall of major crypto assets as panic selling swept the market.

We saw celsius, popular crypto savings, and lending platform, putting a halt to its operations, suspending withdrawals of assets after the native token crash. Nexo, a similar platform also halted all withdrawals in the aftermath of the sudden price drop. Remitano, a local peer-to-peer exchange platform also recently halted the deposit and withdrawal of some major cryptocurrency assets including BCH.

The most troublesome of all these incidences was that of Coinflex, a new exchange that was recently launched with BCH as the major asset on their platform. Coinflex stopping deposits and withdrawals became a major concern because it happens to be the sole provider of the bridge that enable people to move BCH in and out of the smartBCH network. Incidences such as this can cause a lot of confusion and affect the value of the currency which in this case is BCH. Many have been selling their BCH and crypto assets due to a fear that the end of the world for BCH has come.

Although the actions by the exchanges were completely irresponsible, they are also part of the FUD that has been driving the BCH value down. The fear-mongering practices of these exchanges have made people scared to invest in anything which is not BCH. This is something that has become a major problem for cryptocurrency proponents, and it is the main reason why the BCH market has been in a downward spiral. There is a common myth that BCH will become worthless and all people should sell and buy something better.

However, there are strong reasons why BCH will not crash, and those who are in panic selling should be careful because they could be making a big mistake.

1. The BCH economy is not based on speculation

There is a misconception that the entire crypto-economy is based on speculation. The only time that people made money in the crypto economy was when the prices of Bitcoin or Ethereum were rising. However, this was a different type of gain that people got by buying coins on the exchanges and selling them back for a profit when they rise in price. This is not the way that the crypto economy is supposed to operate because, in reality, the value of each asset is determined by how many people use that particular coin to transact. The more people use the coin, the higher the value of that particular coin. If a coin gets more support from the community, it is likely to be a sustainable coin no matter its value.

Right now, there are over 10 million users of the BCH blockchain which is about 20% of all the users of the Bitcoin network. By the time the adoption dust settles, there could be more than 50 million BCH users in the community, which is a very huge market. And that is a lot of people willing to use the coin to move their business and/or personal transactions.

2. The rate of transactions on BCH is high

This is a fact that many people do not understand. The true value of a coin lies in its ability to move its supply and demand in the cryptocurrency market. The higher the transaction volume, the higher the value of that coin. BCH, in particular, is known for its quick transaction times and hence it has the highest transaction volume in the crypto-market. In fact, BCH has a lot of support in the US, Canada, Australia, Japan, and many other countries where people are moving their money and real estate into BCH. This supports the notion that the BCH coin is not just a currency but a worldwide payment network.

3. Even if BCH went lower, it still wouldn’t have a bad future

No matter how low the price of BCH might get, it is unlikely that it will disappear altogether. If this scenario happened, there would be a lot of liquidity and chaos in the market. The assets that people will be selling in order to buy BCH would cause damage to other coins, and the value of BCH would just increase.

Moreover, Merchants and businesses who use BCH as a payment system and have accepted BCH as payment in the past would not abandon the coin and switch to other coins. This means that BCH would continue to grow as a payment method because there will be more people who are ready to accept the coin.

4. BCH was originally created for the Mt Gox problem

If one was to look closely at the coin’s original intent, it would be seen that Bitcoin Cash was supposed to be a payment system for Mt Gox. However, the Japanese exchange that handled the business of Bitcoin did not want to accept BCH because it could not process the higher transaction volume that BCH offered. And so, Bitcoin Cash was formed so that Bitcoin could continue to be a universal payment system for anyone. Bitcoin Cash offers people the ability to move their bitcoins from one currency to another without having to exchange the funds first for fiat.

5. BCH will grow in the long run even if BTC goes down in value

This is because when people have confidence in a coin, they move more money into the coin when the price is low and they are willing to hold on to it. Right now, the BCH market has reached an apex and it is going down due to fear. However, if the BCH price comes back up again, the demand for BCH will increase, and hence it will be backed up again with more demand for BCH.

Imagine if the BCH price were to rise again and then tumble down, the demand for BCH will increase for a few weeks, and then another batch of people will enter the market and take more BCH. Since the price of the coin would have recovered and stabilized, the growth rate of the coin would be very high.

Bottom line

After a few months of turmoil, the crypto market will stabilize and growth will resume. This will be good news for the Bitcoin Cash community and the BCH price will see a sharp rise. For the moment, there is still some uncertainty surrounding the cryptocurrency market, and hence the BCH price is down but this could change very soon as people gain confidence in the currency and increase their demand.

Unfortunately, people should not assume that their Bitcoin Cash is done with its drop in value just because it is up or down. The only thing that matters is whether the coins are earning income for you which will be a double gain when the price of BCH gets back up again soon.