5 Ways To Invest In Bitcoin Cash In 2021
Considered the most successful of all the early hard forks emerging from Bitcoin, Bitcoin Cash was launched in August 2017, with the main aim of increasing Bitcoin’s original block size from 1 MB to 8 MB, thus enabling cheaper, faster, transactions at a greater rate per second. Though Bitcoin Cash isn’t anywhere close to the original Bitcoin when it comes to popularity, the scalability of this popular cryptocurrency gives it a lot of fundamental strength.
Despite being launched not too long ago, Bitcoin Cash has consistently remained amongst the top 20 cryptocurrencies, based on the market cap. It initially traded in the vicinity of $240 per coin (BCH) after its launch, and grew almost 16 times in market value within four months, peaking at a little over $3,900 by December 20th, 2017. Its price receded thereafter, dropping down to almost $100 per coin a year later. It’s fairly evident that Bitcoin Cash’s solid fundamentals and fluctuating prices make it an excellent investment choice for traders and investors. BCH was trading at $880 per token, with a market cap of $15.5 billion at the time of writing this article. Keeping its good investment potential in mind, let’s go over 5 different ways of investing in Bitcoin Cash.
1. Trade Bitcoin Cash
The most commonly used way to invest in Bitcoin Cash is trading the cryptocurrency through an online cryptocurrency broker. It is also amongst the most profitable options as it enables you to effectively use Futures, CFDs (Contracts for Difference), Options and other similar financial derivatives to take long/short positions on BCH and bet on its future price movements. Furthermore, you can also use the leverage option usually provided by the brokers to magnify your gains. But please be aware, the losses, if any, will be magnified too. Therefore, this approach should be used with great caution.
As can be gauged, there’s no exchange of BCH coins’ ownership involved in this type of trading activity and hence you won’t require any crypto wallets to store your coins either. However, please note, this investment method is ideal only for investors who have some knowledge of and experience in short-term trading, and know how to use analytical tools to their benefit.
Where to trade Bitcoin Cash
In order to use financial derivatives to trade BCH, you’ll need to open an account with a regulated broker platform first. The best way to identify a broker who meets all your requirements and can efficiently handle your trades is by comparing and shortlisting the best options on the market. Some of the important factors you can use to compare them include their payment options, regulatory status, customer service, commissions/fees and security features. We understand that this task can be very tiring and time-consuming and therefore have done it all on your behalf. Please find below a list of the best brokers in the market today.
2. Buy and HODL
The term HODL originated in 2013 when GameKyuubi, a username on the Bitcointalk forum, posted, “I AM HODLING’ in a semi-coherent and drunk state! He was ranting about the Bitcoin price which had crashed 39% after the reports of a Chinese crackdown in December 2013. What he meant was that he planned to hold onto his Bitcoins, despite the market fluctuations, as he was sure of the cryptocurrency’s long-term prospects. HODL is also widely perceived as a backronym of ‘Hold on for Dear Life’. Though such etymologies do a fair job in explaining the phrase’s meaning, that’s not how it actually originated (as also explained above).
Today ‘Buy and HODL’ investment strategy is used throughout the cryptocurrency industry and beyond. What makes it special is that you don’t require any trading knowledge and experience, to benefit from it.
Needless to say, you’ll need to buy Bitcoin Cash first, to be able to hold on to it for the long term. This can be done at any of the popular cryptocurrency exchanges on the internet, or even at a few broker websites that allow for the sale and purchase of actual crypto coins.
Buying Bitcoin Cash
Buying BCH coins online can sometimes prove to be a very tedious affair, especially if it’s your first time purchasing a cryptocurrency. Our team took cognisance of this fact and worked on some dedicated web pages which explain the most effective ways of purchasing BCH in the market today. These pages are focused on using a few popular payment methods like credit card, debit card and Paypal to acquire Bitcoin Cash. You can find links to these web pages below. Please remember, some of these payment methods may not be available in your country, in compliance with the local crypto laws. And the ones available may involve certain transaction costs.
3. Invest in Cryptocurrency and Blockchain Companies
Investing in the shares of a company which is focused on the development initiatives surrounding the Bitcoin Cash blockchain or has substantial holdings in the BCH network is another effective and alternative way of getting invested in the cryptocurrency. The way cryptocurrencies and blockchain technology have taken the world by storm, especially over the past few years, is nothing short of remarkable. Today, almost every industry in the world is being disrupted by blockchain tech. At such a time, if you successfully locate a company which is about to launch the next big blockchain innovation, or is planning to integrate Bitcoin Cash in a rather unique or big way, you could immensely benefit from buying its stock. This way, you could benefit both from the inherent potential of BCH per se, as well as the growth prospects of that company.
Where to invest in Bitcoin Cash shares
You will once again need to use a regulated broker platform to buy the shares of a BCH or blockchain-based organisation. The broker may either facilitate the direct purchase of that company’s shares and/or enable you to speculate on the stock’s future price movements via derivative products mentioned earlier in this article. Hence, just as in the case of BCH, you can also take long/short market positions on the shares of that company, and possibly use leverage too, to gain higher market exposure. As stressed earlier, your profits can get magnified significantly when you indulge in leverage trading, but so can your losses. Tread carefully.
To select the right broker for investing in a company’s shares this way, you must compare multiple broker services based on some crucial parameters, including user-friendliness, regulatory status, payment options, market reputation, spreads and more. You can do all this hard work on your own, or use our team’s recommendations provided below. We carried out the same comprehensive research, basing our final choices on the essential parameters mentioned above.
4. Become a Miner
Mining refers to the process through which new BCH transactions get confirmed, leading to the creation of fresh blocks on the Bitcoin Cash blockchain. It involves the use of electricity and computing power to solve complicated cryptographic puzzles. When miners take over this responsibility, they get a chance to create new blocks, which can potentially get accepted by the BCH network. A miner does this activity either alone, or through a mining pool, depending upon the resources s/he can make available for the activity. Mining pools generally have a higher chance of creating new blocks, simply because of the sheer computing power they bring to the table, by combining the hash rate or resources of multiple miners.
Owing to the high market value of BCH, mining this cryptocurrency is an extremely competitive activity these days. Bitcoin Cash uses the same SHA-256 hashing algorithm as its parent cryptocurrency, Bitcoin. The block production time is also 10 minutes, the same as that of BTC. The mining rewards too are halved every 4 years. The current mining reward for BCH is 6.25 coins, expected to reduce by half in November 2024. The cost of mining hardware can range anywhere from $650 for a basic device, to around $3,700 for a complex mining rig (ASIC).
Where to store Bitcoin Cash
Any amount of BCH you earn through mining activity will need to be kept somewhere safe for future use. The same applies to any BCH tokens acquired by trading or buying the cryptocurrency. The online space is inundated with various types of dedicated as well as general crypto wallets to store BCH. They can be broadly segregated into two categories - hardware wallets and software wallets. Whilst a hardware digital wallet offer a higher degree of security, their software counterparts are ideal for people who like their coins to be easily and quickly accessible at all times. Below we’ve listed some of the best crypto wallets offered in the market today.
5. Become a Bitcoin Cash Developer to Make Money
Whilst Bitcoin Cash’s original purpose has always been to function as an efficient ‘Peer-to-Peer Electronic Cash’, which it has been meeting very well, the future looks brighter, with permissionless innovation, global adoption, unrestricted growth and most importantly decentralised development. The cryptocurrency’s blockchain has various other inbuilt functionalities that permit the development of many interesting decentralised applications and smart contracts. There are all kinds of games, NFTs, shopping apps, payment gateways, social networks and more being developed on the Bitcoin Cash blockchain already.
A career in Bitcoin Cash development can be highly rewarding, making you somewhere in the vicinity of $175,000 per annum, much higher than the national average in the US. You can then easily use your earnings to buy more BCH for yourself and increase your stake in the digital currency.
Expert Tip on When and How to Invest in Bitcoin Cash“ To conclude, we’ve covered 5 different ways of investing in BCH in this guide, including trading BCH, buying and holding BCH, investing in the stock of a BCH-based company, mining the BCH coins, and lastly, becoming a BCH developer. You can considerably improve your chances of succeeding at Bitcoin Cash trading and cryptocurrency investing if you learn about fundamental and technical analysis, and also master a few of the prominent analytical tools available in the market. As a parting note, we’d like to stress that there’s no right or wrong time for BCH investments, as long as you base your market decisions on solid research, and remain open to learning and growing with your mistakes. ”- Ashish Sood