Bitcoin Cash has held its own as a top 10 cryptocurrency since it was launched in 2017. The underlying technology largely mirrors Bitcoin, albeit, with a few slight differences.
Nevertheless, if you want to invest in Bitcoin Cash from the comfort of your home - this guide will tell you everything you need to know.
If you're looking to get on the action, this guide on How to invest in Bitcoin Cash will walk you through the process step-by-step
This Includes the process of choosing a trusted Bitcoin Cash broker, the potential risks and rewards to cosnider. We explain the many ways in which you can obtain the digital currency online, what fees to expect, and ultimately - how you can make money from a Bitcoin Cash investment.
What is Bitcoin Cash?
By investing in Bitcoin Cash (BCH), you will be buying a cryptocurrency with a huge market capitalization that currently exceeds $6 billion.
However, this digital currency is anything but straight forward. Not only is it a direct ‘fork’ of the Bitcoin network, but it has since split into two different projects.
With this in mind, we think that you should have a firm grasp of what it is you are actually investing in before you take the financial plunge.
So, Bitcoin Cash is a cryptocurrency that was first launched in 2017. As noted above, the project is a fork of the original Bitcoin blockchain - which means that the underlying code was copied like-for-like.
For example:
Both projects are decentralized - meaning no single person or authority owns the network
Both have a fixed supply of 21 million coins
Both allow you to send and receive funds in a low-cost manner.
With that in mind, you might be wondering what the difference between the projects actually is? Well, those behind the creation of Bitcoin Cash became frustrated with how the original Bitcoin network was making progress.
Largely, this centered around scalability issues, which refers to the maximum number of transactions that can be processed each second. Crucially, as the Bitcoin Cash network processes large block sizes, it can handle more transactions.
It can also process these transactions faster and at a cheaper rate. As such, some argue that Bitcoin Cash is more suitable as a cross-border payments system than its Bitcoin counterpart.
We should also note that the 2017 fork resulted in holders of Bitcoin receiving free Bitcoin Cash. This was at a proportionate rate, meaning that if you held 1 BTC at the time of the form, you would have received 1 BCH.
How Does the Invest in Bitcoin Cash Process Work?
From an investment perspective, understanding the ins and outs of how a cryptocurrency works is somewhat important.
After all, you are investing your hard-earned money into Bitcoin Cash, so you should at the very least have a grasp of why you are backing the project in question.
With that being said, the end-to-end Bitcoin Cash investment process itself is no different from a traditional asset like shares.
This is because you will be investing in the digital currency with the view of making money. Put simply, you will achieve this goal if you are able to sell your BCH coins at a higher price than what you originally paid.
Let’s look at a super-basic example of how a Bitcoin Cash investment works in practice:
You open an account with an online broker that sells Bitcoin Cash
You deposit $1,000 and invest the full amount into Bitcoin Cash
At the time of the purchase, Bitcoin Cash is worth $220
You hold on to the BCH coins for two years
When you get around to cashing out, Bitcoin Cash is worth $680
This translates into a price increase of 209%
As you can see from the above, you originally invested $1,000 into Bitcoin Cash when the digital currency was worth $220. Then, two years later, you sold your Bitcoin Cash investment when BCH was priced at $680.
As such, you made returns of 209% - meaning you cashed out a total of $3,090. Now, if you’re wondering how the value of your Bitcoin Cash investment changes over time, this is based on demand and supply.
Much like traditional shares, as more and more people invest in Bitcoin Cash, the value of its BCH coin will rise.
Consequently, if there are more sellers than buyers, then the opposite will happen. The main drawback here is that Bitcoin Cash does not yield dividends, so the only way you can make money is if the value of the coin increases in the open marketplace.
Ready to dive into Bitcoin cash market?
Why Should you Invest in Bitcoin Cash?
So now that you know how a Bitcoin Cash investment works, we now need to look at the why.
Below you will find some of the main reasons why more and more people are choosing to invest in Bitcoin Cash.
This includes the following:
Previous Upward Momentum Has Been Significant
In performing in-depth technical research on the price action of Bitcoin Cash, we concluded that this cryptocurrency has previously made some monumental returns for investors.
For example, when Bitcoin Cash was originally forked, it was trading on public exchanges at just over $550. In just three months of trading activity, the very same BCH coins were worth $3,665 each. This translates into huge returns of over 560% in a single quarter.
However, like the rest of the cryptocurrency industry, Bitcoin Cash was hit hard by a wider downward trend that saw BCH hit levels of sub-$200 moving into 2019.
With that being said, interest in Bitcoin Cash has since resurfaced - with 2020 gains smashing most other asset classes.
For example, BCH hit lows of $152 in March, Bitcoin Cash has since breached $350. This amounts to gains of over 125% in less than 8 months of trading. But, as we cover in more detail shortly, this is much less than Bitcoin has achieved in the same period.
Underlying Technology is Arguably Better Than Bitcoin
As we covered earlier in this How to Invest in Bitcoin Cash Guide, the digital currency arguably possesses superior technology to Bitcoin.
Sure, the former is a direct fork of the latter. But, Bitcoin Cash developers have since made certain tweaks that allow the project to offer a faster, cheaper, and more scalable transaction platform.
The main crux of this is as follows:
The maximum Bitcoin 'block size' is just 1 MB, while it's 8 MB with Bitcoin Cash. In simple terms, this is what ensures that the Bitcoin Cash network performs better than Bitcoin.
It takes the Bitcoin network 10 minutes to confirm a transaction as valid. The Bitcoin Cash network has the capacity to adjust its block processing time depending on demand. As such, if it needs to, it can confirm a transaction significantly faster.
As per its larger block size, Bitcoin Cash is able to scale the maximum number of transactions that it can process each second. Bitcoin, on the other hand, is unable to do this. As such, the network is capped to around 7 transactions per second.
As you can see from the above, from a purely technical standpoint, Bitcoin Cash is arguably the better network of the two.
Low Barrier to Entry is Great for Beginners
Newbie investors are best suited to asset classes that are easy to buy. Not only that, but it must be possible to access the asset in question with a small amount of money. Bitcoin Cash meets these requirements for several reasons.
First and foremost, although Bitcoin Cash has averaged a price of between $150 and $350 over the past couple of years, you actually don’t need to buy a full BCH coin. On the contrary, and much like Bitcoin, this cryptocurrency can be fractioned down.
After all, it is a digital currency so this makes sense. If, for example, you were to use a regulated broker like eToro, you could invest in Bitcoin Cash from just $25.
So, if BCH was valued at $250 at the time of the purchase and you invested the minimum, this means that you would own 10% of a single Bitcoin Cash coin, or 0.1 BCH.
This is crucial from a risk-management perspective, as most cryptocurrencies are volatile. As such, you can keep your risk to a minimum by investing small amounts. This also allows you to diversify into other cryptocurrencies without breaking the bank.
For example, if you were to deposit $200 at eToro, you could effectively invest $25 into 8 different cryptocurrencies. In doing so, you can ensure that you are not exposed to just Bitcoin Cash.
How to Invest in Bitcoin Cash - Various Options Available
When it comes to the specifics of making an investment into Bitcoin Cash, there are several ways in which you can do this. As we cover shortly, the cheapest and most convenient way of making an investment is via a regulated broker.
With that said, you can also invest in Bitcoin Cash via an ATM.
Let’s explore how this works.
Bitcoin Cash ATMs
It is now possible to invest in cryptocurrencies via a specialist ATM. At the time of writing, there are almost 13,000 such ATMs across 71 different countries.
While the vast majority of these ATMs support Bitcoin purchases only, some actually allow you to invest in Bitcoin Cash, too.
In the US and Canada, for example, this covers over 3,000 ATM locations in various cities and regions. In Europe, there are approximately 500-ish such terminals. Asia, Australia, and New Zealand have just a handful of options to invest in Bitcoin Cash via an ATM.
With this in mind, you should first head over to the CoinAtmRadar website to see if there is a Bitcoin Cash ATM nearby.
If there is, the investment process typically works as follows:
You visit your nearest ATM and select Bitcoin Cash from the list of supported coins
You then enter the amount that you want to invest in your local currency
For example, if you’re based in the US, then you might enter $75
The Bitcoin Cash ATM will then display the exact amount of BCH coins that you will get - based on the size of your chosen investment
For example, a $75 purchase might leave you with $68 worth of BCH after taking into account transaction fees
Next, you insert $75 cash into the ATM
Finally, the ATM prints a ticket with your Bitcoin Cash wallet credentials
We should make it clear that while convenient, investing in Bitcoin Cash via an ATM does require at least a basic knowledge of how cryptocurrency wallets work.
This is because you will need to use the credentials printed on the ATM receipt to claim your BCH coins. This is an easy process for those in the know-how, but somewhat intimidating for newbies.
Furthermore, and perhaps most pertinently, cryptocurrency ATMs are by far the most costly way to invest in Bitcoin Cash.
You should expect to pay anywhere between 10% and 20% in transaction fees, which is monumental. After all, by paying 20% in fees, you need Bitcoin Cash to increase by this figure just to break even!
Bitcoin Cash Broker
If you don’t fancy paying 10-20% in transaction fees or there simply isn’t a suitable crypto ATM nearby, then you should consider making an investment via a regulated broker. In fact, not only is this more convenient than driving to a physical ATM, but cheaper, too.
For example, there are brokers active in the space that charge less than 1% to invest in Bitcoin Cash.
You then have the likes of eToro - which charges no commissions at all. By using a regulated online broker, you will also be able to deposit funds with your preferred payment method.
For example, eToro supports debit cards, credit cards, e-wallet, and bank transfers. This means that you can invest in Bitcoin Cash without needing to leave your home.
On top of being cheaper and more convenient, the online broker option can also be the safest.
This is all-but-certain to be the case if the broker is licensed by a reputable body. For example, eToro is regulated by the FCA, ASIC, and CySEC. This means that you have regulatory protection on multiple fronts.
Would you consider investing in Bitcoin Cash?
How to Choose a Platform to Invest in Bitcoin Cash
As we covered in the section above, online brokers offer the cheapest, safest, and most convenient way to invest in Bitcoin Cash.
However, the most challenging part is knowing which broker to sign up with. After all, there are hundreds of such platforms active in this space - each promising the moon on a stick.
To help clear the mist, below we explain the most important factors that you need to look out for when choosing a broker to invest in Bitcoin Cash.
Licensing and Reputation
Without a doubt, the most important metric to consider when choosing an online broker is safety.
This is especially the case when investing in Bitcoin Cash, as time and time again we hear about cryptocurrency exchange getting hacked. This has often resulted in clients of the exchange in question having their digital currency holdings stolen.
With this in mind, it is fundamental that you only invest in Bitcoin Cash via a regulated broker.
As we briefly covered above, this should be with a reputable, tier-one licensing body that is known to keep its brokers in check. Once again, this includes the likes of the FCA, ASIC, and CySEC. In the US, the broker should be registered with FINRA - which eToro is.
By using a trusted broker to invest in Bitcoin Cash, you will benefit from several safeguards that cannot be rivalled by unregulated exchanges.
This includes:
Audit: All regulated brokers will have their books audited by the respective license issuer(s). This ensures that the broker is offering fair and transparent trading services to all clients.
Account Segregation: This safeguard is crucial, as it ensures that brokers keep client funds in a separate bank account from their own working capital. In theory, were the unlikely to happen and the broker went bankrupt, your capital should be ring-fenced.
Investor Protection: Depending on where you live, you might also benefit from an investor protection scheme. You should check which license issue you are covered by in this respect (if at all), to what limit, and whether or not this covers cryptocurrency investments
KYC: By opting for a regulated broker, you can feel safe in the knowledge that each and every trader on the platform has had their identity verified. This keeps crime and fraud away from the broker in question.
As you can see from the above, choosing a Bitcoin Cash broker that is regulated is a non-negotiable metric.
Fees to Invest in Bitcoin Cash
All brokers charge fees. After all, they are in business to make money. In the Bitcoin Cash investment scene, these fees can vary quite wildly. In most cases, you will need to pay a trading commission every time you buy and sell Bitcoin Cash.
This is typically expressed as a percentage and then multiplied by your stake. For example, the broker might charge 2% ‘per slide’. If you were to invest in Bitcoin Cash at a stake of $1,000 - this would result in a commission of $20. Then, if you cashed out your Bitcoin Cash investment when it was worth $3,000 - your 2% commission would amount to $60.
As we noted earlier, eToro is a 100% commission-free broker, so the above fee does not apply. Other fees to look out for include deposit/withdrawal fees - especially if you are planning to use a debit/credit card.
For example, popular broker Coinbase charges 3.99% on debit card deposits. Binance is somewhat cheaper at 2%, although this is still expensive. eToro, on the other hand, charges just 0.5% (0% on USD deposits).
Minimum Bitcoin Cash Investment and Payments
We discussed earlier the importance of diversifying when you invest in Bitcoin Cash. The only way to do this is to choose an online broker that supports low minimums. At eToro, you can invest just $25 into Bitcoin Cash.
Although you must meet a $200 minimum deposit, there is no requirement to spend the full amount straight away. On the contrary, you can use the balance to invest in Bitcoin Cash at a later date, or a completely different asset class altogether.
As a side note, don’t forget to check what payment methods your chosen Bitcoin Cash broker supports.
This might vary depending on your country of residence. If you want to deposit funds with an instant payment method - then opt for a broker that supports debit/credit cards or e-wallets.
Storage and Cashing Out
We mentioned earlier that when you invest in Bitcoin Cash via an ATM, you need to have an understanding of cryptocurrency wallets. This is also the case when you make a purchase online - as most platforms do not have adequate security controls in place to keep your coins safe.
With that said, we must once again revert to the importance of choosing a regulated broker to invest in Bitcoin Cash. The reason being is that licensed platforms like eToro will store your Bitcoin Cash coins for you.
This means that you don’t need to worry about transferring the BCH coins into a digital cryptocurrency wallet. Instead, you can keep them at eToro until you decide to withdraw your Bitcoin Cash investment out!
Ready to invest in Bitcoin Cash?
How to Invest in Bitcoin Cash Today - Step-by-Step Walkthrough
If you have read our How to Invest in Bitcoin Cash Guide up to this point, then we hope that you now have a firm understanding of the potential risks and rewards.
If you are looking to invest in Bitcoin Cash right now - whether that’s online or via your mobile phone, follow the steps outlined below.
Note: The guidelines below are based on top-rated Bitcoin Cash broker eToro. This is because it takes less than 10 minutes to get started, minimum crypto investments start at just $25, and there are no commissions to pay.
Step 1: Open an Account
Visit the eToro website and open an account. As a regulated broker, you’ll need to provide some personal information and contact details. You’ll also need to confirm your mobile phone number and create a username and password.
Step 2: Upload Some ID
eToro will now ask you to complete a quick KYC (Know Your Customer) process. This simply requires you to provide a copy of your government-issued ID (passport or driver’s license). You’ll also need to provide a copy of a recently issued bank account statement or utility bill.
Note: If you are not investing more than $2,250 into Bitcoin Cash right now, you can upload the above documents at a later date.
Step 3: Make a Deposit
Although the minimum Bitcoin Cash investment amount is just $25 at eToro, you still need to meet a $200 deposit.
Now that you have made a deposit it’s time to invest in Bitcoin Cash. Simply enter ‘Bitcoin Cash’ into the search box and click on the ‘Trade’ button.
Step 5: Complete Bitcoin Cash Investment
Finally, enter the amount that you wish to invest in Bitcoin Cash. At eToro, this is always in US dollars regardless of where you are based. You won’t pay any commission on the trade.
Step 6: Cashout Your Bitcoin Cash Investment
You can view the value of your Bitcoin Cash investment at any time by heading over to your eToro portfolio. This will display the realizable value of your investment in dollar terms. If you want to cash your investment out, simply hit the ‘Sell’ button.
After confirming the sale, the funds will be placed into your eToro cash account. Then it’s just a case of withdrawing the fund snack to the deposit method that you used to fund your account.
How to Invest in Bitcoin Cash - The Bottom Line
Investing in Bitcoin Cash is easy, safe, and super-convenient when using eToro. As we have explained throughout our guide, the regulated broker allows you to invest in Bitcoin Cash commission-free and at a minimum of just $25.
Best of all, you don’t need to have any understanding of digital crypto wallets - as eToro safeguards your coins until you decide to cash out.
How much should I invest in Bitcoin Cash?
You should create a sensible investment plan that not only takes your personal budget into consideration but the overall risk. For example, you might want to limit your Bitcoin Cash investment to 10-20% of your wider portfolio. The rest should consist of other assets to ensure you are well diversified.
Is Bitcoin Cash a good investment in 2021?
Bitcoin Cash increased in value by over 125% in 2020. Of course, these returns are huge. However, its Bitcoin counterpart saw growth of over 400% during the same period. This is why diversifying across several digital currencies is crucial!
How do I start investing in Bitcoin Cash?
If you want to invest in Bitcoin Cash from the comfort of your home - it should take you no more than 10 minutes. Simply head over to the eToro website, open an account, deposit funds, and choose how much you want to invest. The minimum deposit is $200 and the minimum investment into Bitcoin Cash is $25.
Can I invest $100 in Bitcoin Cash?
The minimum amount that you can invest in Bitcoin Cash will vary from provider to provider. For example, Bitcoin Cash ATMs usually allow you to invest from just $10. Popular online broker eToro requires just $25. Other platforms in the online space require significantly more.
Can you lose money on Bitcoin Cash?
Whether it's cryptocurrencies like Bitcoin Cash, stocks, or even bonds - all investments come with the risk of loss. Once again, this is why you should keep your stakes to an amount you can afford - and always diversify your portfolio!
