How Bitcoin Cash Achieved $1700 In 2021

The price of Bitcoin Cash has been underperforming since its peak of $1700, reached in May 2021.

From roughly $320 on January 1st, BCH started growing in parabolic terms and reached $1700 on May 12th (2021). Then a rapid decline followed, and together with the rest of the market Bitcoin Cash entered a lengthy bear market, leading to recent lows not explored since 2020 ($260).

Multiple factors contributed as the rising number of transactions and the increase of the users transacting on the Bitcoin Cash chain.

Throughout this bear market for BCH, smartBCH was also released, with the potential to become a disruptive sidechain offering high throughput and cost-efficiency in the smart contracts field.

SmartBCH, though, is meant to significantly influence the fiat valuation of Bitcoin Cash in the long run. The effects of this technology on the price of BCH will probably emerge later this year and depend on the market performance as well.

Bitcoin Cash in May 2021

Investors did not support cryptocurrencies offering privacy features in 2021. Moreover, it seems they didn't enjoy crypto with money features either.

While Bitcoin Cash achieved a decent ranking and price in May 2021, still, this was short-lived, and BCH price took a hit.

Several reasons helped Bitcoin Cash reach $1700, although the decline today indicates these metrics were not sustained and therefore didn't last.

In March and April 2021, we witnessed these three events that significantly contributed to the positive price action of BCH:

i) Increased transactions
ii) Tipb.ch Twitter Event
iii) The "Elon Musk" comment

The daily BCH transactions surpassed Bitcoin Cash for two months

The rise of daily transactions resulted from the explosive growth of noise.cash. 

When Noise.cash changed the transactions model, transaction numbers regressed but still to a higher average than previously.

(source)

BCH Tweets went parabolic

The tipb.ch event coincided with Musk's comment on Bitcoin Cash, as these two events occurred around the same date (25 March).

During the tipb.ch event almost one year ago, Twitter was overwhelmed by posts containing #BCH and #BitcoinCash hashtags.

The number of daily Tweets is an indicator many are watching. It is also an indicator picked by algorithmic trading bots.

(source)

Twitter algorithms probably shadowbanned twice these numbers so the real Tweets of all those participating in the tipb.ch contest of 2021, were a lot higher.

On March 26th, 2021, two days after the announcement, the tipb.ch event was already generating tens of thousands of (BCH-related) Tweets.

Trading bots on social media were buying BCH not stop for weeks until an abrupt end to the bull market was initiated as severely "bad news" appeared (mostly from China).

Traders set their social media bots accordingly. They will always buy significant amounts especially when it concerns an established cryptocurrency.

Musk's Interest in Bitcoin Cash

While the tipb.ch event was running, popular Bitcoin Cash advocate Kim Dotcom tweeted (referencing Elon Musk) and managed to get a response from the top influencer on Twitter and wealthiest person on the planet at the time.

While I don't expect Elon Musk to keep responding to Kim's messages or endorse Bitcoin Cash again, it was probably one of the factors that helped Bitcoin Cash attract investors' attention.

(source)

It seems both these events (tipb.ch and Elon Musk) occurred right when BCH needed it, during a time BTC was losing its market share and the rest of the crypto market was advancing.

As the price of BCH was reaching $1700, the market was not going to continue its parabolic advance. News from China appeared and crashed prices with PoW mining banned, and an exodus of miners from China taking place.

Long Term Factors

There are three more factors that should have contributed to the price of BCH but will mostly influence Bitcoin Cash in the long run.

• Institutional adoption

• Merchant adoption

• On-chain developments and smartBCH

All the above are fundamentals. Maybe they contributed to an extent to the temporary "pump" of BCH in May 2021 but should be considered long-term factors of adoption of Bitcoin Cash (as a currency and an asset).

Institutions

Institutional adoption seems to have stalled lately for the cryptocurrency market. The main weakness in this field is the fund managers aggressively promoting the Bitcoin (BTC) brand and ignoring the rest innovation this field produces.

During 2021, multiple institutions integrated Bitcoin Cash as a payment or investing option:

- JPMorgan Chase & Co. (USA)
- SBI Holdings (Japan)
- Rakuten (Japan)
- 21 Shares (EU)
- Interactive Brokers (USA)
- AMC Theaters
- PayPal (USA (2020) & UK (2021))
- Bancolombia (Colombia)

Although, institutional funds entering the Bitcoin Cash ecosystem did not soar in volumes when compared to BTC and Ethereum.

Institutions are not performing research on cryptocurrencies, but follow the financial advice of just a handful of fund managers that do not seem to understand this financial technology either.

Merchant Adoption

(source)

BCH Merchant adoption has been increasing, and Bitcoin Cash initiatives create a culture of spending BCH instead of fiat for our daily payment needs. The "Accepting Bitcoin Cash" signs are now on display in tens of thousands of shops worldwide, but still, a lot more is needed.

In a few regions like the Caribbean, Australia, and Venezuela, Bitcoin Cash can achieve a small share of the payments market, but still too small to compete with traditional payment networks (Visa/Mastercard/Paypal).

This is a long-term objective for Bitcoin Cash to succeed as a means of exchange, and it can take many years of effort.

Ecosystem developments - smartBCH

SmartBCH contains enough dynamics to propel Bitcoin Cash into the top-10 cryptocurrencies again since smart contracts networks attract billions of funds even during bearish market conditions.

In the case of smartBCH was a Cardano technology, it would be advertised massively since its inception. The Cardano approach is hyping up and popularizing code that is not ready for meaningful adoption but operating a testnet for five years.

Terra, Solana, Cardano, Chainlink, Polygon, and almost all similar networks did hackathons, visited conventions, and received billions in funding. Maybe for Bitcoin Cash, this is not possible but should be considered for smartBCH.

In Conclusion

The market bull was not the reason for the price reaching there. If Musk once again talks in favor of Bitcoin Cash price will definitely double in days. The way the market conditions are used brings the desired results.

Bitcoin Cash was on its way to $5000 until the Chinese government decided to end PoW mining citing environmental concerns and applying a blanket ban on crypto in May 2021.

The price boost of Bitcoin Cash during the 2021 cryptocurrency bull run is based on some of the factors described. $1700 was nowhere near the targets of BCH investors, when compared to the market conditions.

The $1700 price was too low for a robust blockchain network of Bitcoin Cash with vast potential and developments.

The rise of transactions, the low fees, and the security and stability of the blockchain presented a state-of-the-art network to investors, with no flaws and no single point of failure.

What helped BCH was publicity, advertising, and PR, by popular personalities, although it lacked a professional marketing plan.

The fundamentals were there, yet Bitcoin Cash reached investors for just two months, and shortly afterwards, we witnessed the price depreciating.

The next article contains options and models Bitcoin Cash could follow in its marketing to reach sustainable growth and achieve a better price and standing in the crypto market indexes.

Cover Photo by Jonatan Pie, on Unsplash

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