Will Bitcoin Cash ever see another bull run?

Bitcoin Cash (BCH) is one of the most divisive cryptocurrencies in the market, with supporters claiming it is about to stage a comeback and critics arguing the asset will be dead within a couple of years.

Apart from one spectacular surge during April 2018, Bitcoin Cash’s performance has been pretty lacklustre since its creation in the summer of 2017.

Some analysts think we’re in line for more of the same next year, whereas others suggest its winning features could propel the price to as high as $6,000 – up from just $265 today.

What is Bitcoin Cash?

Before we explore the arguments for and against a Bitcoin Cash bull run, it’s worth taking a brief look back at its history. Although Bitcoin Cash was created just two-and-a-half years ago, it has managed to achieve a market cap of $4.8 billion, making it the fourth-biggest cryptocurrency in the market today.

The coin is a fork of Bitcoin and was created in response to the challenges surrounding Bitcoin’s scalability and high transaction fees. Bitcoin Cash’s creators essentially wanted to create a cryptocurrency that was as close as possible to a digital version of cash.

Bitcoin Cash itself forked in August 2018 as a result of infighting among the development team. This resulted in the creation of Bitcoin Satoshi’s Vision and Bitcoin ABC. The latter continues to be recognised as Bitcoin Cash.

Price history

Bitcoin Cash achieved its all-time high in December 2017 when it soared to $4,356 in parallel with the Bitcoin boom. Since then, it has generally been on a downward spiral, apart from one surge in April-May 2018 when it rose from $643 to $1,766.

Its 2019 peak came at the end of June when it reached $486, but it has subsequently dropped by 45% to $265.

The case for a Bitcoin Cash bull run

Optimists believe Bitcoin Cash has such appealing characteristics that a bull run is inevitable. The main advantage of Bitcoin Cash is it enables cheap and fast transactions. Online businesses can integrate it into their systems relatively easily, which means many retailers around the world now accept it.

Bitcoin Cash can process a higher number of transactions per second than Bitcoin, and its transaction fee is around $0.125 compared with Bitcoin’s $1.31. Bitcoin Cash is more lucrative for miners than Bitcoin is, which some experts suggest could encourage more miners to switch to Bitcoin Cash and fuel its growth.

There are lots of positive developments when it comes to Bitcoin Cash’s adoption. AT&T, one of the world’s largest telecoms giants and a top-10 Fortune 500 company, now lets users pay in Bitcoin Cash for their bills through BitPay.

The brewery Brewdog is offering shares in its company in exchange for cryptocurrency including Bitcoin Cash, while BCH is now accepted by more shops and businesses in Venezuela than the original Bitcoin cryptocurrency.

There have also been positive moves in the wider financial market. Bitcoin.com announced in September that it is seeking to launch a Bitcoin Cash futures product on a Commodity Futures Trading Commission-regulated exchange as part of an attempt to ramp up interest in the asset.

In the same week, fintech company Amun announced the listing of a Bitcoin Cash exchange-traded product on the Switzerland-based stock exchange Six.

The case against a Bitcoin Cash bull run

Critics argue that Bitcoin Cash is essentially redundant. The coin has neither reduced Bitcoin’s prominence nor created a secondary market for which it is uniquely suited. Bitcoin itself has become fast and affordable, which undermines Bitcoin Cash’s USP.

RT anchor Max Keiser wrote a tweet in August in which he described Bitcoin Cash as “a wounded, volatile animal”, adding: “A year from now it will struggle to stay above $100. The project was DOA from day one. 90% of its market cap is the product of manipulation that will be impossible to meaningfully sustain.”

On top of all this, it’s impossible to shy away from the fact that despite the many positive Bitcoin Cash developments we’ve witnessed, not one has managed to make a long-lasting impact on its price.

Conclusion

Bitcoin Cash is certainly making headway when it comes to adoption, but its weak performance in comparison with Bitcoin can’t be ignored.

If you’re a pessimist, 2020 is likely to bring more of the same. If you’re an optimist, Bitcoin Cash has lots of room for recovery, and it’s possible that its wider adoption could spur a much-needed rally. All we can say for now is: watch this space.