Bitcoin Cash is an offshoot of Bitcoin. The cryptocurrency appeared in August 2017 due to disagreements in the Bitcoin community. The developers diverged on methods to solve the scalability problem, while more and more users complained about the very long transaction confirmation time. As a result, it was decided to split the blockchain into two parts, Bitcoin and Bitcoin Cash. The latter processes more transactions in less time.
The BCH price mainly depends on the popularity of Bitcoin Cash among both miners and average users. So, in 2020, it was included in the list of PayPal cryptocurrencies, which had a positive effect on the coin’s value. However, in April of the same year, many miners left the blockchain after the halving (the reward decreased from 12.5 BCH to 6.25 BCH) and joined more profitable projects. As a result, the hash rate has decreased, and there was a real threat to the network's security. All these factors have led to a decrease in the BCH/USD price.
When trading BCH/USD, it is important to consider the general sentiment in the cryptocurrency market. The main trend is created by Bitcoin, with which BCH has a very strong correlation. This should be taken into account by both traders and long-term investors.
The value of the token depends on the state of the Bitcoin Cash network. The blockchain had several more hard forks. The developers sought to increase the block size to 128 MB. However, regular hard forks destabilize the system, which negatively affects the price of BCH. So it happened in 2018 with the release of Bitcoin SV. As a result, the BCH price collapsed to a record low of $75.
Traders and investors should carefully monitor the news regarding Bitcoin Cash. Disagreements in the community or within the development team, accusations of centralization, and reports of critical errors in the network can decrease the BCH/USD exchange rate. At the same time, news about the increase in trading volumes and market capitalization of the project will positively impact the BCH price.
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