Updated April 1, 2022

How to Invest in Bitcoin Cash BCH

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Wondering whether it's the right time to buy Bitcoin Cash? Here are three reasons why BCH may be the best choice to lead the market as a P2P currency.

With its low fees and fast transaction times, Bitcoin Cash has a promising future.

Some even say that BCH is "the true Bitcoin", and is better aligned with Satoshi Nakomoto's original vision for crypto.

But before you invest, it's important to understand the pros and cons of BCH. In this guide, find out how to invest, where to store it, and what exactly it is.

What is Bitcoin Cash (BCH)?

Bitcoin Cash is a cryptocurrency that was created in 2017 as a hard fork of the original Bitcoin code.

It was created to better fit the original goals of Bitcoin, which Satoshi Nakomoto described as "a peer-to-peer electronic cash system" in the original Bitcoin whitepaper.

How is Bitcoin Cash different from Bitcoin?

The main difference between Bitcoin Cash and Bitcoin is that Bitcoin Cash (like Litecoin) has a larger block size, which allows for more transactions to be processed and reduces fees.

But the differences between Bitcoin and Bitcoin Cash go deeper. Over the years, Bitcoin has diverged from the original goal of electronic currency, and many have argued that Bitcoin goes against Satoshi's original vision.

Plus, Bitcoin's small block size has led to long transaction times and high fees.

Bitcoin Cash was created to solve these problems. BCH increased the size of blocks to between 8 MB and 32 MB, resulting in more transactions per block. To this day, transaction times are faster and fees are lower on the Bitcoin Cash blockchain than they are with Bitcoin.

One of the biggest proponents of Bitcoin Cash is Roger Ver (or "Bitcoin Jesus"), who continues to advocate for Bitcoin Cash as the ultimate form of peer-to-peer electronic cash. Ver maintains that Bitcoin Cash is the cryptocurrency that most closely achieves the vision outlined in Satoshi's original Bitcoin whitepaper.

Roger Ver is also the CEO of bitcoin.com, a website that educates people on Bitcoin and Bitcoin Cash.

Why Invest in Bitcoin Cash (BCH)?

So why would an investor choose to invest in BCH? Here are three big things Bitcoin Cash has going for it:

  1. Huge Opportunity in Peer-to-Peer Electronic Cash
    Bitcoin's main appeal is as a store of value, like gold, while Bitcoin Cash strives to be the leading form of digital cash. As a result, Bitcoin is often compared to the precious metals market, and its market cap is often compared to the market cap of gold.

    While there is a large market for gold and other assets, Bitcoin Cash is going after a much larger total addressable market (or TAM): the global peer-to-peer cash market.

    The global P2P/Cash market is valued at around $100 trillion. Currently, Bitcoin Cash's market cap is just $5.5 billion. If BCH eventually captures just 1% of the global cash market, its market cap would grow by nearly 20x to a value of $1 trillion.

    Of course, if this happened, the price/value of BCH would be 20x as well, going from ~$300 (where it is today) to ~$6,000.

    Again, that scenario doesn't assume BCH becomes the market leader in the world of cash or P2P payments. It merely needs to capture 1% of total market share.

  2. Lower Fees, Faster Transactions
    If cryptocurrency is going to truly compete as a form of currency, it must be fast and have low fees. Bitcoin Cash was specifically created for speed and low fees.

    Currently, a BCH transaction costs about $0.20, while a BTC transaction costs a little over $1 USD. While $1 might still seem low, it would quickly add up if you were regularly paying in BTC. No one wants to pay an extra dollar every single time they buy a coffee, for example.

    Plus, when the market is really heated, Bitcoin fees have gone as high as $25 per transaction.

    In addition to its low fees, BCH also has faster transaction times. Some argue that this speed and low cost mean BCH is further along toward being an appealing form of currency when compared to BTC.

  3. Satoshi's Original Vision
    Bitcoin Cash advocates like Roger Ver argue that Bitcoin Cash is closer to the original vision for Bitcoin that is outlined in the Satoshi whitepaper. If you read the actual whitepaper, it's hard to disagree. Bitcoin is described as a peer-to-peer payment technology and digital cash.

    Meanwhile, Bitcoin today is thought of more as a store of value, a digital form of gold, and a hedge against central banking and inflation. People tend to hold on to their Bitcoin in hopes it will appreciate, rather than transact in it as a form of cash.

    If the crypto community wants a more cash-like form of crypto, Bitcoin Cash could see massive adoption and appreciation.

How to Invest in Bitcoin Cash (BCH)

Bitcoin Cash is one of the most popular cryptos and is available on many big exchanges and finance apps, like PayPal, Venmo, and Robinhood.

However, these apps still don't let you withdraw your crypto off their platform. More experienced crypto investors or those who want more storage options might consider the following exchanges:

eToro
BCH is available for purchase on eToro, a popular exchange for its focus on social trading.

Buying BCH on eToro is simple:

  1. Sign up for an account on the eToro website.
  2. Verify your account with a valid U.S. passport, driver's license, or state ID.
  3. Fund your account (For US clients, the minimum deposit is $10[1] and $200 if you're using CopyTrader).
  4. Visit the BCH page and click "Trade".

Crypto.com
BCH is also available for direct purchase on Crypto.com. You can buy it in just four easy steps:

  1. Sign up for an Exchange account on their website.
  2. Verify your account by clicking "Connect to Exchange" in the email they send to you.
  3. Deposit fiat or cryptocurrency to fund your account.
  4. Visit the BCH page and click "Buy BCH".

Binance
Binance users can buy BCH on the biggest crypto exchange (by volume). Binance is known for its low fees.

To buy Bitcoin Cash on Binance:

  1. Sign up for an account on Binance's website or app (download: App Store, Google Play).
  2. Follow the instructions in their confirmation email to confirm your account.
  3. Visit BCH's page and click "Buy".

If you've invested in BCH, you'll next want to ensure that it is stored securely. Review your best options in the section below.

What Does It Cost to Buy Bitcoin Cash (BCH)?

The cost of Bitcoin Cash changes 24/7, as the blockchain is always open and running transactions, unlike traditional markets.

That said, the important thing to remember when using exchanges is that you aren't just paying the price of BCH itself. You also have to consider fees.

Here are some common fees you might encounter when investing in BCH:

  • Transaction Fees: These are often charged by the exchange to cover the cost of trading.

  • Debit / Credit Purchase Fee: Many exchanges charge more for these purchase methods than others.

  • Withdrawal Fees: Many exchanges charge you for withdrawals. Prices often vary depending on the withdrawal method.

  • Inactivity or Maintenance Fees: These are fairly uncommon on exchanges. These are fees charged for having an account, or having but not using one, usually for 12 months.

  • Gas Fees: These are also fairly uncommon on exchanges. They are charged to pay for the cost of executing an operation on the Blockchain.

  • Spread: This is the difference between the sell and buy price, often used by "commission-free" exchanges as a way of profiting from a transaction without disclosing it. Some exchanges charge it on both buy and sell transactions, others only once. This cost is sometimes hidden, and may be unlisted by the exchange.

  • Deposit Fees: Typically exchanges offer a variety of deposit methods. Sometimes they're free, others may be extremely expensive. Common deposit methods include ACH Bank Transfer and Wire Transfer.

Remember, these fees vary by exchange, so make sure to do your research on whichever exchange you choose to use.

Where to Store BCH Safely

After you invest in BCH, it's time to decide where to store it. The biggest decision is whether to leave it on the exchange or decide to move it to a wallet.

A general rule of thumb: Storing crypto in exchanges is more liquid, but less secure.

  • If you're looking to make a short-term buy and trade, you might choose to leave your crypto on an exchange.
  • If you want more security or plan to store it long-term, it's best to store BCH on a wallet.

Several popular wallets support BCH, including Atomic Wallet and Exodus Wallet.

Those who want maximum security often choose to store their BCH on an external, cold storage wallet like the Ledger Nano S or X or the Trezor wallet.

Is Bitcoin Cash (BCH) Worth the Risk?

The biggest risk with Bitcoin Cash lies in its larger block size, which some say makes it susceptible to becoming overly centralized. But the larger blocks are also what gives Bitcoin Cash its fast transaction times and low fees.

To its credit, Bitcoin Cash does appear to be working hard to remain a decentralized project. As they claim on Bitcoin.com: "Nobody controls or owns Bitcoin Cash. There's no CEO, and you don't need to ask for permission to use it."

Others argue that, as Bitcoin scales up and achieves a larger market cap, it may evolve to have lower fees and faster transactions in the future. In other words, it might eventually have all the same benefits as Bitcoin Cash, while also remaining more decentralized.

A problem with using either Bitcoin or Bitcoin Cash as "cash" right now is the volatility inherent in each of them. However, some have speculated that if these assets grow to larger and larger market caps and find their way into more institutional portfolios, the volatility will decrease.

This would also make them more appealing as forms of "cash" because their value would be less likely to wildly fluctuate overnight.

Bottom Line

BCH is a unique cryptocurrency aiming to become a major player in digital, electronic cash payments. There's a huge opportunity in this market, but also risks to consider.

That said, BCH is making great progress considering its fast transaction times, low fees, and commitment to decentralization. Also, the commitment to Satoshi's original vision as outlined in the classic Bitcoin whitepaper is an admirable goal of the project.

Investors have to do their own due diligence to decide whether BCH and its risk-reward profile fit into their own broader investment portfolio and goals.

References

Write to Corbin Buff at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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