Despite the popularity of Bitcoin Cash (BCH), the BCH/USD pair is not one of the crypto/fiat majors. Forked off the bitcoin blockchain in 2017, in response to the Segwit upgrade, the BCH/USD pair gained some traction in the bull market but dropped significantly afterward.
Its supporters see BCH as a store of value and a better medium of exchange than bitcoin. So far, however, Bitcoin Cash has failed to live up to its initial hype and the expectations of its believers. Due to BCH’s similarities to bitcoin, the BCH/USD pair closely follows the price evolution of the BTC/USD pair.
Having forked off bitcoin, BCH is like the top cryptocurrency in many ways, with a few essential differences. These differences make up its selling point.
The people behind BCH consider it the best money in the world. BCH allows users to send money all over the world in seconds and gain transfer confirmations in minutes.
Like bitcoin, BCH is censorship resistant, permissionless, and accessible to anyone. Its supply is finite. There can never be more than 21 million BCH in existence. Also, like bitcoin, BCH uses a public ledger to record transactions. BCH is a pseudo-private cryptocurrency, offering varying degrees of privacy to its users depending on how they use it.
BCH’s network fees are lower than those of bitcoin, acting as an incentive for new users. One of the significant differences between the two cryptocurrencies is the block size. With larger block sizes of up to 32 MB, BCH can process transactions faster. The drawback of this feature is that the BCH network is less secure than the bitcoin one.
BCH’s vulnerability stems from the fact that its blocks require less mining power to verify.
Since its birth from the bitcoin blockchain, BCH has struggled to gain adoption.
The Fed’s aggressive interest-hiking has pushed the USD past the EUR for the first time in decades. Despite doing well against other fiat currencies, the inflationary spiraling of the USD has barely slowed down. Its buying power is lower than ever before, and its continuing strength against other currencies may spell trouble for the global economy.
The USD is the most-traded currency in the world. Many countries use it as their official currency, some of them de-facto. Even more countries use the USD as their reserve currency.
In addition to gaining strength against fiat currencies, the USD has been building momentum against cryptocurrencies as well.
As the Fed continues to print money, it inflates the supply of USD and dilutes its value. Money-printing rewards those who receive the newly printed money at the expense of the current holders of the currency.
Given the relative obscurity of BCH and its similarities to BTC, the factors affecting the BCH/USD price are, by and large, the same as those that shape the BTC/USD price.
The current factors that impact the performance of most cryptocurrencies are geopolitical events like the Ukraine war, the looming energy crisis, the Fed’s tight monetary policy, and spiraling inflation.
Cryptocurrencies have been tracking the stock market lately due to increased adoption and exposure to mainstream economic factors. That said, volatility has been waning, and the prices seem to have stabilized.
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Other major currency pairs
BUY - rate is expected to increase, i.e. the first currency gains value against the second currency.
SELL - rate is expected to go down, i.e. the first currency is expected to lose value against the second currency.