A year in the life of Bitcoin Cash BCH cryptocurrency

June 07, 2018
Chris Wheal

Cryptocurrency prices been jumping around at break-neck speed and new entrants join all the time. One arrival on most people’s radar is Bitcoin Cash – known by the symbol BCH. So how this cryptocurrency fared in its first year?

As with most cryptos Bitcoin Cash has had ups and downs. It is hardly surprising when the general public start jumping on an already accelerating bandwagon – when people start asking: “should we buy bitcoin for our grandchildren?” – then alarm bells start ringing.

BCH has had a mixed year, but on the whole has shown resilience.

A top 5 contender

Things certainly started well. Soon after launch in summer 2017, BCH figured amongst the top five currencies on the crypto market. By its third day in existence, Bitcoin Cash was the third cryptocurrency behind Bitcoin and Ethereum in terms of market capitalisation. BCH’s market cap currently (22 May 2018) stands at over $20.29bn. The currency’s supply limit is 21 million BCH.

Worth $399 at launch, BCH price peaked in December 2017 when it hit $3,708.9 before falling sharply in value during the early part of 2018 – the low point being $611.25 in early April. However, it had bounced back to over $1,849.9 by May 5 before investors started hitting the sell button in late May when the price fell at one point to the $$1,175 level.

Bitcoin cash BCH

Bitcoin Cash price peaked in December 2017 but has been highly volatile since. Credit: Shutterstock

Bitcoin Cash against fiat currencies

Has BCH done better against specific currencies? The answer is no. Bitcoin Cash rose 17% against the dollar in December 2017 largely on the back of Bitstamp, one the world’s leading exchanges announcing that it would be adding Bitcoin Cash to its exchange. Wallet provider ‘Bitwalla’, also confirmed around the same time that it would allow its customers to keep their Bitcoin Cash.

Against the euro, BCH has jumped around in price. But as with performance against the US dollar, BCH’s high point versus the euro came in late December 2017 when it hit €3,187.
The correlation with the dollar was also shown when BCH hit a low point versus the euro in early April 2018 when it fell to €529.34 before showing patch recovery through May when it mostly flirted around the €1,000 level. By late may it was down to €990.01 with trading volumes of €333,366,096.
Trading volumes were highest (in both dollar and euro trading) in December 2017 – $8,248,059,899 and €6,943, 695,211 respectively.

Price drivers for BCH

In terms of factors that influence price and volume – as alluded to earlier – availability is a key one. BCH is listed on a wide range of exchanges and supported by several crypto wallets. Such ease of access gives the coin credibility and is a key driver in sustaining or building demand for a currency.

Bitcoin Cash is viewed as being more lucrative for miners than bitcoin. We could see more miners switch from BTC to BCH – hence increased volume and price growth for BCH.

This hasn’t really happened as yet. There is an element of people mining their favourite coin first, which is typically the first one they mined – frequently Bitcoin. However, a concerted switch could happen if BCH sees a massive increase in price, while at the same time, BTC experiences a major loss in price.
We have seen some big, but very short spikes of BCH price, which resulted in a big swing of hashpower towards BCH, but they did not last long enough to have a long-term impact.

Competitors to Bitcoin Cash BCH

Competition from other coins could yet negatively impact the uptake of Bitcoin Cash. Credit: Shutterstock

Future price of Bitcoin Cash

So what does the future hold in store for BCH? In terms of visibility and growth, the past year has been largely positive for BCH but in this highly competitive market, things can change fast.

BCH is not the only digital currency designed to act as peer-to-peer electronic cash. Some will even offer lower fees and faster transactions. Competition from other coins could yet negatively impact the uptake of Bitcoin Cash.

While there have been some quick wins for BCH in terms of adoption, as with any other crypto, the value of BCH will be influenced by the level of adoption cryptocurrencies achieve among the wider community on an ongoing basis.

Some BCH critics have highlighted the centralisation of BCH mining as one of the key drawbacks for a project that aims to create a decentralised cryptocurrency. Not surprisingly, given the number of variables, there is no clear consensus of opinion regarding BCH yet.

What the experts say

Akbar Thobhani – CEO of cryptocurrency broker-dealer SFOX is bullish. “Bitcoin Cash is set to quadruple its block size, from 8MB to 32MB — delivering transaction capacity far in excess of what it requires to meet its network demand.”

High profile US investor and an early advocate of Bitcoin, Roger Ver, recently referred to Bitcoin Cash as the “the real Bitcoin”’ predicting that before long BCH would have a bigger market capitalisation, trade volumes and user base than Bitcoin.

But not everyone is so positive. “The fact that Bitcoin Cash is controlled… by two individuals (Roger Ver and Jihan Wu) – that is a huge difference from Bitcoin,” Investite.com CEO Jon Najarian told CNBC back in December.

However, this was heavily disputed, with reports insisting that no two individuals control bitcoin cash and no person was anywhere close to controlling 50%. Rather than being ‘in control, it was suggested that Roger ver and Jihan Wu control less than 40% of bitcoin cash’s hash rate.

While BCH is well placed now as a leading crypto, in such a saturated market – there are more than 1,700 cryptos in existence – nothing can be taken for granted.

There are inevitably doubts whether the vast number of cryptocurrencies will survive over the longer term. It becomes harder to differentiate yourself as a crypto the more crowded a market is and future technological advancements and security levels may sort the also-rans from the leaders. Still an unregulated market, changes in this regard could radically reshape the cryptocurrency market too.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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