We’ll be sharing the top Experts predictions for Bitcoin Cash in 2021.
Read our Bitcoin Cash BCH Price Analysis for 2021
Bitcoin Cash (BCH) started life as an offshoot of Bitcoin (BTC), following the original cryptocurrency’s now-infamous hard forking of 2017. Whilst the two inevitably share many technical similarities, Bitcoin Cash sought to address the scalability issues of its predecessor and accommodates a much larger block size, which in turn allows more transactions to be included in each block. At its heart, Bitcoin Cash seeks to refocus the original intention of Bitcoin - to be a decentralised, peer-to-peer payment platform for everyday consumers.
The new formula appears to have been something of a success, as Bitcoin Cash is well and truly out of the shadow of its predecessor and at the time of writing was the 7th largest cryptocurrency by market capitalization, which stood just short of $7.5 billion.
Like most cryptocurrencies, Bitcoin Cash experienced a tumultuous year in 2020, with the COVID-19 pandemic putting the breaks on what had been a promising bull run. Following a chaotic summer, Bitcoin Cash’s fortunes appeared to turn a corner in September and prices have been steadily increasing since.
So is Bitcoin Cash still a good investment going forward? In the following Bitcoin Cash price analysis for 2021, we will weigh up the various factors affecting the cryptocurrency and find out what some experts are predicting for the year ahead.
BCH Price Forecast for 2021
Bitcoin Cash - An Overview
An essential step in any Bitcoin Cash price analysis 2021 is detailing some of the technical particulars of the network and looking at the main ways in which it differs from Bitcoin.
As we have already noted, Bitcoin Cash was created when Bitcoin hit a hard fork back in 2017. When this occurred, anyone holding Bitcoin received an equivalent amount of Bitcoin Cash. This led to the latter having an unusually high debut price on crypto exchanges, at around $600.
By the time the fork occurred, the original Bitcoin had hit certain issues. The cost of confirmation on the blockchain had surged and transactions were plagued by backlogs and delays. It was intended that Bitcoin Cash would solve these issues with an increased block size. At the time, the block size on the Bitcoin network was limited to 1MB, whereas Bitcoin Cash increased the size to between 8 MB and 32 MB, thus allowing for up to around 25,000 transactions per block (as of September 2018) compared to the 1000 - 1500 possible via the Bitcoin blockchain. The intention of Bitcoin Cash was that it could be used for daily transactions, potentially competing with existing traditional methods, such as VISA or Mastercard.
Of course, there are plenty of similarities between BCH and BTC. Both rely on the Proof of Work consensus mechanism, which means that computers - or nodes - on the network solve complex equations to ‘mine’ for new coins. For this purpose, both Bitcoin and Bitcoin Cash use the world’s largest cryptocurrency miner, Bitmain. Initially, both coins shared the same mining algorithm (Emergency Difficulty Adjustment), although Bitcoin Cash later adjusted its version to make it easier for miners to generate the BCH token and prevent them alternating between BTC and BCH to their own advantage. The supply of both Bitcoin and Bitcoin Cash is capped at 21 million coins.
Interestingly, Bitcoin Cash experienced a hard fork of its own around a year after it came into existence. In 2018, it split into Bitcoin Cash ABC - what we now refer to as Bitcoin Cash - and Bitcoin Cash SV (Satoshi Vision). The forking was related to proposed updates to include smart contracts in Bitcoin Cash’s blockchain network and increase the average block size. BCH then underwent another hard fork in November 2020, as part of further planned updates to the network protocol.
So what does all this mean for our Bitcoin Cash price analysis for 2021? On paper, Bitcoin Cash should be a ‘better’ version of its predecessor, but as of yet it has not come close to rivalling Bitcoin. With the development of Bitcoin SV, which purports to have addressed issues with Bitcoin Cash, the technical particulars of BCH give us very little to go on when predicting price movements, but it is nonetheless important to be aware of how Bitcoin Cash differs from the other Bitcoin incarnations to help us predict potential divergence in each one’s price trajectory.
History of Bitcoin Cash Price Movement
One way to start forming a Bitcoin Cash price analysis for 2021 is with a retrospective of the cryptocurrency’s past price movement. This can help us identify patterns in how the charts have moved and also to some extent gauge how certain market forces might affect BCH in future.
As we have mentioned, Bitcoin Cash had a somewhat different start in life to many other cryptocurrencies. Whilst most coins - including Bitcoin - entered the market almost worth next to nothing, BCH started trading at around $600 from the outset. This was, of course, entirely down its creation being a result of the Bitcoin fork. However, there was initially plenty of investor support for the new coin and prices soared to over $2,400 by December 2017. But this initial success turned out to be something of a poisoned chalice as rumours of insider trading quickly began to circulate, prompting Coinbase to suspend BCH trading. This saw the value of Bitcoin Cash plummet to $704. Aside from a spike in April 2018, the downward trend continued until January 2019, when BCH was trading at an all-time low of $107. The rest of 2019 was also somewhat lacklustre, with Bitcoin Cash bouncing around between $200 and $300, before finishing the year at a disappointing $209.
It seems that many of the technological advancements that were promised by Bitcoin Cash failed to materialise - at least not to the extent that many investors were predicting. Contrary to initial expectations, the average size of blocks mined on Bitcoin Cash’s blockchain ended up being far smaller than those of Bitcoin, which meant that the increased transaction rates that were promised were not fully realised. Whatsmore, since the inception of Bitcoin Cash, Bitcoin’s transaction fees have been reduced significantly, not least thanks to the SegWit upgrade, reducing the advantages of Bitcoin Cash over its predecessor.
However, whilst things may be sounding somewhat pessimistic at this stage in our Bitcoin Cash price analysis for 2021, it seems investors still have some faith in the altcoin and things started to turn around going into 2021.
Would You Consider Investing In Bitcoin Cash BCH?
Bitcoin Cash in 2020
It’s fair to say that 2020 can hardly serve as a benchmark for a Bitcoin Cash Price analysis for 2021; the COVID-19 pandemic was something of an anomaly that caused an unprecedented global downturn. However, it’s still useful to consider how coins weathered the storm - or didn’t, as the case may be.
After a subdued end to 2019, BCH soared from just over $200 to $393 by the 31st of January 2020. It continued to climb steeply, before hitting a 12 month high of almost $500 in early February. After a disappointing 2019, it looked as though Bitcoin Cash may have turned a corner, until the pandemic struck and its price dropped sharply, bottoming out at around $149.
Things improved slightly over the summer months and there was a surprise rally in August, which saw BCH creep up to over $309, before it went back into decline, down to between roughly $200 and $250 across September and October. However, once again Bitcoin Cash seems to be on the road to recovery, whilst its price growth may not have been as steady as other cryptocurrencies, it ended 2020 trading over $340 and was well on its way to breaking the $400 mark, prompting renewed interest and speculation from the wider crypto industry.
It remains unclear how the November hard fork will affect BCH price moving forward. In theory, a network upgrade should lead to bullish sentiment, but there have been issues with exchanges refusing to list the competing tokens resulting from the fork: Bitcoin Cash Node (BCHN) and Bitcoin ABC (BCHA). Coinbase, for example, announced that it will not be listing the latter.
Experts predictions for Bitcoin Cash in 2021
An essential consideration for any Bitcoin Cash price analysis for 2021 is whether or not there is any consensus between crypto industry figures as to how well BCH can be expected to perform in the year ahead. We found that opinions were somewhat divided over Bitcoin Cash, but here’s what a few prominent analysts and investors had to say:
Roger Ver
Crypto expert and long-time advocate of Bitcoin Cash, Roger Ver, has reiterated his support for BCH, insisting that Bitcoin Cash is the only version that truly conforms to the original Satoshi whitepaper. He has recently been quoted as saying: “I am very bullish on Bitcoin Cash, just like I was when I was the very first investor of Bitcoin in 2011.” As far as a Bitcoin Cash price analysis for 2021, he believes that whilst BTC will see its value soar by 10 to 20 times in the year ahead, Bitcoin Cash price will at least double its value from what it is now. Mr Ver claims that BCH will continue to be popular because it can be stored and spent similar to cash, facilitating day to day spending.
Mike Novogratz
Whilst Mike Novogratz has held back on making a Bitcoin Cash price analysis for 2021, he did take to Twitter to ask his followers what cryptocurrencies out of diem, bitcoin cash, USDC, and tether (USDT) “has the best chance of winning payments?” Many prominent voices in the crypto industry, including General Protocols’ developer Jonathan Silverblood, who said “out of the current contenders, I work on and believe in [bitcoin cash] BCH as the rails. In particular, I do so because they are focusing on the right use case, and are innovating in this field specifically.”
Kim Dotcom
Controversial crypto investor and founder of hosting service Megaupload, Kim Dotcom is extremely bullish on BCH. “Bitcoin > great for asset storage, Bitcoin Cash > great for payments.” Bitcoin Cash at $310 today. I expect $3000+ next year. Why? More and more vendors accept crypto. Vendors want low fees and fast transactions. I’m bullish on BCH. I’ll retweet this in a year. Maybe earlier,” she tweeted recently before adding: “BCH has many use cases today. And K.im will use BCH.” Dotcom created the K.im platform, branding it as “the ultimate content monetization platform.”
Jedidajah Otte
Writing as the Times Money Mentor, Jedidajah Otte advises caution for altcoins in general - including Bitcoin Cash specifically. Whilst he does not offer a Bitcoin Cash price analysis for 2021, Mr Otte warns that crypto newcomers should “exercise caution” when approaching BCH, not risking more than 5% of their available investment funds.
Factors affecting Bitcoin Cash price
Bitcoin
All cryptocurrencies are affected by Bitcoin in some form or another. The original cryptocurrency is seen as something of an indicator of the wider market and, given that BTC often operates as a kind of reserve currency in many crypto transactions, its performance is always going to be relevant to other coins that may be in your investment portfolio. This alone makes Bitcoin a key consideration for our Bitcoin Cash price analysis for 2021.
However, Bitcoin Cash is also effectively in direct competition with its predecessor, so there are other factors at play when considering how BTC could directly impact Bitcoin Cash. For example, BCH was intended to reduce transaction costs with larger blocks, but any technological innovations that allow Bitcoin to improve its own usefulness as a peer-to-peer payments platform will eat away at any advantages of Bitcoin Cash, which is likely to stunt any potential growth.
As such, anyone investing in BCH will need to keep a close eye on technological developments with regards to the original Bitcoin, as well as how BTC might be reflecting investor appetite for cryptocurrency in general.
Regulations related to cryptocurrency
Regulation is an ongoing concern for crypto enthusiasts and investors. Effectively, a single piece of aggressive regulation from one of the world’s major economies could reduce a coin’s value to almost nothing overnight. Ripple, for example, saw around 50% wiped off its value at the end of 2020, when the SEC ruled that its native token, XRP, was a tradable security rather than a currency.
However, it should also be remembered that there is the potential for positive regulatory changes, which could see huge gains for the cryptocurrency market in general. One of the most significant pieces of regulation for any future Bitcoin Cash price analysis for 2021 to consider, will be the upcoming EU regulatory framework that is due to be finalised over the coming months.
Retail Support
As we have discussed, Bitcoin Cash is intended to be a peer-to-peer payments platform for the general consumer. As such, any major retail chains or commercial platforms that start supporting BCH as a payment option will have a positive impact on the coin’s value. Payments platforms like Flexa have made it easier than ever for consumers to pay for things with crypto and PayPal has recently begun allowing users to buy and spend BTC, so BCH has some ground to cover in this sense.
Buyer demand
Ultimately, the price of Bitcoin Cash, like any other tradable instrument, will be dictated by supply and demand. There are mixed opinions of Bitcoin Cash and its potential to upstage its predecessor, making it difficult to speculate on any potential surges in demand. A combination of the factors listed above will either motivate or demotivate investors, but the volatility of BCH means there is plenty of potential for savvy investors to make significant gains - if they can accurately predict when to get in and when to get out.
Ready To Invest In Bitcoin Cash BCH?
Bitcoin Cash price analysis for 2021
Making an accurate Bitcoin Cash price analysis for 2021 is no mean feat. The altcoin has experienced changing fortunes since it was created in 2017 and many leading voices in the crypto sphere have failed to accurately predict the impact of BCH. Whilst even the most ardent Bitcoin Cash proponents cannot be anything but slightly disappointed in the overall performance of the coin, it should be noted that it has shown considerable resilience and has maintained its position as one of the top ten biggest cryptocurrencies by market cap.
Even turning to technical analysis from top cryptocurrency platforms does not paint an especially clear picture.
Smartereum is hugely optimistic, predicting that Bitcoin Cash price will hit $6700 by the end of 2021 and continue growing across 2022. Meanwhile, Tech Bullion has offered a more subdued prediction, believing that the November 2020 hard forking will lead to a bullish run on BCH, but maxing out at around $400 for 2021.
On the other hand, TradingBeasts forecasts suggest that BCH will stagnate throughout the next year, with the price of Bitcoin Cash hovering around $350 from January right through to December 2021.
Should you invest in Bitcoin Cash in 2021?
There’s little doubt that Bitcoin Cash has the potential to yield good returns in the coming year, but potential investors should heed the words of certain industry voices and approach the altcoin with caution. As our Bitcoin Cash price analysis for 2021 has highlighted, there are numerous factors that could affect the price of BCH and several of these are, to a large extent, unknown quantities.
Of course the same could be said of any other altcoin, but the success of Bitcoin Cash depends largely on its viability as a peer-to-peer payment system, as well as its maintaining some advantage over other cryptocurrencies competing in this space.
Another important consideration is that, whilst plenty of analysts are predicting growth for Bitcoin Cash in 2021, they differ hugely on exactly how much growth. The more optimistic estimates of BCH soaring to thousands of dollars should perhaps be taken with a pinch of salt. Instead, investors should manage their expectations and look for more subdued growth. A sensible target would be in the region of slightly above $400 - with anything more being viewed as a bonus.
Finally, the effects of the hard fork in November may yet to be fully realised. The more risk-averse investors may wish to wait it out for the first few weeks of 2021 before committing funds and adding BCH to their portfolios.
Bitcoin Cash price analysis - Conclusion
Bitcoin Cash has always been a somewhat divisive cryptocurrency. Whilst some industry experts believe it is everything that Satoshi had intended the original Bitcoin to be, others believe it has failed to deliver on its promises and what is often described as a hostile environment for miners will severely limit BCH’s capacity for sustainable growth. The last 12 months have been a trying time for all financial markets, but as our Bitcoin Cash price analysis for 2021 has pointed out - BCH seemed to be making some headway with a solid bull run before the COVID pandemic hit.
How Bitcoin Cash will perform in the first few weeks of 2021 will largely depend on the industry reaction to the November forking and whether exchanges like Coinbase relax their stance on refusing to list both Bitcoin Cash Node and Bitcoin ABC. With this in mind, it’s possible that many investors will hold off until the effects of the fork become clear - which could further delay price growth.
Of course, day traders will relish the frequent fluctuations in Bitcoin Cash’s value, but investors looking at the long term will need to keep close tabs on several factors: in particular, the result of the Bitcoin Cash fork, any upcoming regulatory changes and developments within the original Bitcoin blockchain.
What Are The Benefits of Bitcoin Cash Trading?
Bitcoin Cash trading enables traders to speculate on whether the price of BCH will rise or fall in value, without the need of taking ownership of Bitcoin Cash.
Bitcoin Cash (BCH) is a digital currency forked from the Bitcoin network around the end of 2017 with the purpose of being the true application and realization of the original white paper of Satoshi. As defined by Satoshi Nakamoto, it is intended to be the true “peer to peer electronic cash.” Driven by discontent with the scalability problems of Bitcoin, Bitcoin Cash is intended to be a more realistic crypto coin on the blockchain for regular transactions.
Why Trade Bitcoin Cash?
Trading in Bitcoin Cash has many advantages. Any of the following points are due to the benefits already provided by BCH as one of today’s strongest cryptocurrencies. Trading BCH encourages seasoned people to bet on the crypto market, regardless of whether or not they already own any of the cryptocurrency. Bitcoin Cash Trading is all about trying to decide if the price of BCH will rise or fall, and when to hop on the bandwagon.
The benefits of Bitcoin Cash trading include:
Low transaction fees
Liquidity
Choosing whether to go long or short
Bitcoin Cash volatility
Bitcoin Cash market access
Efficient tax benefits
Safety whilst trading
1. Low Transaction Fees
BCH provides processing rates that are almost essentially zero. It implies that without thinking about exorbitant service costs, people can trade any amount of BCH they’d like.
At the moment of writing, BCH’s average transaction fee is $0.0035. In January of 2018, the price had reached its high when it reached $0.904. The total processing fee hasn’t staggered too much since and has remained relatively stable since. Since last year, the transaction fees have hovered around the $0.0040 and $0.0060 range, which is negligible.
Despite Bitcoin Cash’s current tepid condition, the transaction fee is not likely to escalate dramatically because the blockchain has not been pushed to its limits.
2. Liquidity
Liquidity is a measure of how quickly and effectively Bitcoin Cash can be converted into cash, ensuring no changes in the market value of BCH. The importance behind liquidity lays in the fact that it largely affects how easily you can open and close positions. A trader can easily find a buyer in a liquid market without having to slash the asset’s price to make it more appealing.
Due to the fact that Bitcoin Cash offers more scalability, this, in turn, means that it has a greater trading volume. The greater trading volume then turns to more trading activity and finally concludes to a more liquid market. Liquidity can also be measured by analyzing the bid-ask spread for BCH. The bid-ask spread measures the difference between the price a buyer is willing to pay for a coin and the price at which the seller is willing to accept a coin. The lower the bid-ask spread, the more liquid the coin.
Generally speaking, the Bitcoin Cash market is namely illiquid since trades are spread across many exchanges, which means that comparatively small deals may have an enormous impact on market prices, creating volatile demands on BCH.
3. Choosing Whether To Go Long Or Short
Much like the price of a stock, Bitcoin Cash always has a value for which it will be sold. In this sense, you can profit off of your BCH by selling your coins after the market value has increased. When you purchase BCH coins and expect the price to rise, you call this going long. When you negotiate with Bitcoin Cash’s price, though, and you take advantage of values that are both declining and rising in price, this is what is known as going low.
Because of BCH’s rise in popularity, there is a multitude of exchange platforms where you can go long or short with your BCH coins. With these platforms, you’ll have the option to do either, where a rising or declining trend can be predicted at the same time. In most platforms, where you do margin trading, you will always be able to long or short.
4. Bitcoin Cash Volatility
Bitcoin Cash volatility is part of what makes this coin and trading it so thrilling. Rapid intraday price swings will provide traders with a variety of options to go long and short, but with added risk as well. So, if you plan to explore the Bitcoin Cash market, make sure you’ve done your homework and built a policy for risk management. BCH has a relatively high level of volatility, standing around 15.27% on the 7-day mark.
5. Bitcoin Cash Market Access
The Bitcoin Cash Market is usually available for trading whenever you’d like. On virtually all of the top cryptocurrency exchanges, Bitcoin Cash is listed and this means a high degree of safety and efficiency in purchasing and selling this token. In exchange, this also drives acceptance and raises the investment potential of your BCH and increases your chances of greater reselling in the future and higher profit gains by trading.
This is attributed, unlike normal stock markets, to no centralized market administration taking over regulation of market hours. BCH trades can take place at any time of day, wherever you’d like, whenever you’d like. They only however occur between a buyer and seller on various crypto exchanges globally.
6. Efficient Tax Benefits
The opportunity to spread betting and CFD trading on Bitcoin Cash would have substantial tax benefits over investments in virtual, real currencies. It’s an efficient way of practising price watching and getting a good idea of what price fluctuations look like, without the incremental tax costs.
For instance, you are subject to capital gains tax (CGT) when you sell your crypto for a profit gain, for if you purchase something with it for a value higher than what you had initially acquired it for. With spread betting though, you can exclude the liability of owing tax from the calculation as you don’t actually own the assets. On the other hand, a contract for difference, otherwise known as a CFD, is also accountable toward this tax, yet still more efficient and bears less risk. However, you can compensate your risks against your profits from CGT liability, which makes CFDs useful for hedging. Note that dealing with spread bets and CFDs in cryptocurrencies such as Bitcoin Cash is only open to skilled traders, and therefore should be used with caution.
7. Safety Whilst Trading
A powerful blockchain platform is used by Bitcoin Cash and is nearly impossible to hack into. As blockchain needs unanimous approval from all nodes, the transfers and fund transfer history can not be altered by a single user.
Cryptographic encryption provides the entire payment system with another layer of authentication and provides a means to perform safe and protected transactions.
If you want further safekeeping of your BCH coins, you can still make great use of physical (hardware) or software wallets to store your tokens. Dedicated wallets provide an increased security standard relative to trading site accounts and exchange storage.
Should I Buy or Trade Bitcoin Cash?
Before you make a definitive choice, it’s crucial to understand the differences between buying and trading Bitcoin Cash. The use of CFDs would make it easier to determine the viability of investment in BCH with lower risk thresholds involved. Any considerations, such as transaction fees, tax obligations, and security must all be taken into account. If you want to know more about Bitcoin Cash, check out this detailed guide.
You might be interested in buying Bitcoin Cash if…
You want to take full ownership of the Bitcoin Cash amount you buy
You’re happy to pay the entire value of the asset upfront
You don’t mind paying capital gains tax on any profits
You don’t mind waiting for an exchange account before you can buy or sell
You don’t mind introductory limits or maximum deposits
It is fine for you to pay additional fees for deposits or withdrawals
You might be interested in trading Bitcoin Cash if…
You want to speculate on the price of Bitcoin Cash without owning it
You want to leverage your position so that you only place a portion of the cost upfront
You want to take advantage of the tax benefits of spread betting or CFD trading with Bitcoin Cash
You want to start trading straight away
You don’t like maximum deposit limits
You don’t like paying deposits or withdrawal fees