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How to Invest In Bitcoin Cash In 2021

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Bitcoin Cash (BCH)
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Bitcoin Cash came into existence in August 2017, when a disagreement amongst Bitcoin developers led to a "hard fork." Bitcoin Cash's creators broke away from the original Bitcoin blockchain to develop a new protocol that could handle higher volumes of transactions per second.

Bitcoin Cash (BCH) initially traded at around $240 and grew 16x in four months, peaking above $3900 by December 20, 2017. The price has since fallen from those heights, but could be heading back there. This guide will show you how to invest in Bitcoin Cash to ensure you don't miss out on the opportunities it offers.

4 Ways to Invest in Bitcoin Cash

The section below will cover four ways you can invest in Bitcoin Cash. There are different types of investors with varying objectives when it comes to investing in cryptocurrencies, and the following summary will help you to find a strategy to suit your needs.

1. Buy Bitcoin Cash Through an Exchange

Before you join a crypto exchange to buy Bitcoin Cash (BCH), you’ll need to get a crypto wallet where you can safely store your coins. A wallet is a piece of software or hardware that allows users to securely and easily store and access their digital currency.

Software wallets often come in the form of websites and mobile apps, such as Trust Wallet, Coinbase Wallet, and Bread Wallet. These are convenient for investors who want to access their tokens often, to trade or conduct frequent transactions. 

Hardware wallets are devices that look like USB flash drives, and are recommended for investors who hold substantial amounts of Bitcoin Cash. They store your coins offline and only connect to the internet when you need to make a transfer in or out of the wallet, which adds an extra layer of security. Popular options include Ledger’s Nano X and Nano S, as well as the Model T by Trezor.

After acquiring a wallet, you’re ready to buy some Bitcoin Cash. Join a reputable crypto exchange and register an account by completing the KYC (Know Your Customer) process. Regulated exchanges require identity verification checks in order to prevent money laundering and fraud, and although these may seem excessive, they are indicative of a trustworthy exchange. You may need to upload your ID/passport, proof of address, and a selfie to finish the verification process.

Our Recommended Exchange

Always use a reputable exchange to buy cryptocurrencies. Here are our top recommendations—platforms with solid reputations, excellent security, and plenty of liquidity.

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Payment Methods:
Wire Transfer, Bank Transfer
Full Regulations:
CySEC, FCA

2. Buy Fractions of Bitcoin Cash Through an Exchange

A common misconception amongst new cryptocurrency investors is that they have to buy a whole coin, which is often impractical due to the high cost of these assets. In fact, many coins including Bitcoin Cash can be purchased fractionally: you can own a small fraction of one BCH for just $1 (around 0.002 BCH at the time of writing), although some cryptocurrency exchanges do have minimum purchase limits.

Buying fractions of BCH allows you to gain exposure quickly, and build your portfolio over time. There’s no need to save up for a whole coin: simply sign up to an exchange, verify your account, make a deposit, and make your first fractional purchase.

3. Trade Bitcoin Cash Through a Broker

Many investors want to trade cryptocurrencies over shorter timeframes rather than holding them as a long-term investment. If you fall into this category, you can use a reputable broker to trade Bitcoin Cash, or alternatively financial instruments linked to the asset. 

A good broker will offer a range of services, including “spot” trading. This allows traders to purchase Bitcoin Cash at the current (“spot”) price, and then sell it for profit when the price rises. This can be done without setting up a wallet, as the broker retains custody of the coins, and allows you to quickly and easily trade Bitcoin Cash without many of the complications of owning it directly.

Futures contracts, contracts for difference (CFDs), and options contracts are all types of ‘derivatives’ offered by brokers, which allow you to speculate on the price action of BCH without actually buying coins. Many online brokers also allow you to use leverage, which involves borrowing extra capital from the broker for a trade. This can potentially increase your profits (as well as your losses) when trading these instruments. 

Our Recommended Broker

Here are some of the most reputable brokers you can trust to trade Bitcoin Cash and other financial instruments.

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Description:
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA

4. Invest In a Bitcoin Cash ETF

Investing in an ETF, or exchange-traded fund, allows you to gain exposure to Bitcoin Cash through the traditional stock market. 

ETFs are regulated products, which means that they are subject to high levels of scrutiny, so investors can be confident that their money is safe. Many crypto ETFs are composed of many different coins, allowing you to spread your investment across a managed portfolio. Some are composed of one coin only, providing more direct exposure to a single asset such as Bitcoin Cash.

5 Bitcoin Cash Investment Strategies

This section will comprehensively cover five tried and tested investment strategies you can use to venture into the Bitcoin Cash market. As you will see, they differ depending on the investor's objectives and the goal they are trying to achieve.

1. Buy and 'Hodl'

What is it?

‘Hodl’ is part of the crypto vernacular and it means to ‘hold’. It originated as a misspelling in a rant published online by a Bitcoiner, and the term remains popular in the community today. The strategy is as simple as it sounds: you buy Bitcoin Cash and hold it for a long time. 

If you look at crypto charts, which show detailed digital asset performance over time, you will realize the price of coins such as BCH has grown steadily, thanks to increased awareness among the masses. Many expect this to continue as more people around the world embrace cryptocurrencies. Therefore, at around $500 today, Bitcoin Cash may seem like a bargain a few years from now.

What is the benefit of using this strategy?

There are several benefits to using this strategy. If you believe in Bitcoin Cash as a project, and see a future where it is widely adopted, then this is the easiest way to gain exposure. Additionally, you don't have to worry about short-term price volatility, which often scares off new investors. You don’t need to execute a perfectly timed trade either: wait for the price to explode further down the line. This makes ‘buy and hodl’ a great strategy for investors who don’t have the time to watch the market for the perfect entry and exit point. 

2. Day Trading

What is it?

One trademark of the crypto market is its high volatility, which can be a blessing and a curse. It's not uncommon to see the price of a given cryptocurrency make wild swings daily. Double-digit movements are commonplace, and this offers traders the perfect environment to profit from their investments. This strategy involves buying and selling BCH within short periods, usually less than a day, thereby benefiting from the resulting price difference. Here you profit often, even daily, based on price volatility, instead of holding the asset for long-term gains.

What is the benefit of using this strategy?

Like any other investment strategy, day trading has its perks, such as making good returns within a short period. Also, you don't have to worry about owning and safeguarding your tokens using a wallet. And on some trading platforms, you can copy and learn from experts to make the most of the endeavor.

Successful day traders will use risk management strategies, such as stop loss and take profit limits, to limit their downside. According to your risk tolerance, you can set profit targets and loss limits that will automatically close trades when they are reached.

3. Shorting

What is it?

Shorting is a strategy you can use if you expect the price of BCH to fall. In this case, a broker will lend you some Bitcoin Cash, let’s say one coin. You sell that coin on the market for $500 straight away. Later, the price of BCH falls, and you repurchase one coin for $400. You then return the coin you borrowed to the broker, cancelling your debt, and keeping the difference of $100 as profit.

Timing is crucial to make the most of this strategy. You can aid your strategy by learning how to read charts and following the latest developments that are likely to influence the movement of BCH. Remember that if the price of BCH goes up, not down, you will lose out.

What is the benefit of using this strategy?

Shorting has many benefits. Firstly, it allows you to protect your BCH investment against a drop in price. Even if the price falls, a short position will allow you to make a profit. Using a broker that offers CFDs or futures will also allow you to speculate on a negative price movement without having to actually own any Bitcoin Cash. Many brokers also offer leverage, which can help to maximise your profits.

4. Using a Trading Bot for Trading

What is it?

Bitcoin Cash trading bots exist to simplify investing in cryptocurrencies for all, regardless of skill level. If you come across a reputable trading bot and lack the expertise to trade profitably on your own, don't hesitate to use it. Bots are not only for new traders, but also for experienced individuals that would like to automate some of the arduous tasks involved in regular trading. You can invest in BCH using a bot by joining a reputable platform supporting the bot and sitting back and watching as it simplifies your trading.

What is the benefit of using this strategy?

Trading bots are excellent because they level the playing field for all traders, no matter the level of expertise. They save time since they require a few minutes each day to adjust your trading strategy, and also offer potentially higher returns since excellent bots have a high success rate. Bots are built using sophisticated algorithms and integrated with AI, which allows them to collect vast amounts of Bitcoin Cash market data, decode it, and make lightning-fast predictions on the likely direction BCH will take. Most importantly, a bot will help you earn passively.

5. Hedging Bitcoin Cash

What is it?

Hedging involves opening trading positions that cover the gains or losses of another position. In our case, it's possible to rely on CFDs, shorting, and futures to hedge our Bitcoin Cash investment. If we are holding BCH, we can open a short position to protect against a market crash, or alternatively if the price is in an uptrend we can sell BCH futures to guarantee a profit.

What is the benefit of using this strategy?

Hedging Bitcoin Cash has many perks. It will help you secure your capital, ensuring your initial trading position doesn't lead to any financial loss. Also, it does help manage your risk, thereby maximizing your profit potential with limited downside. Additionally, it can help cover the price movements of BCH, reducing the stress of holding such a volatile asset.

Buy Bitcoin Cash Today!

What to Consider Before Investing in Bitcoin Cash

Before you begin your BCH investment journey, there are a few things you need to pay attention to. These can make or break your investment experience.

Fees

There are many fees associated with investing in Bitcoin Cash. For starters, there are network fees associated with buying and selling the token. However, these fees are much cheaper compared to Bitcoin. An average BCH transaction costs only a few cents, and even when the network is in high demand, it doesn't cross $2.

There are also fees associated with exchanges. They will vary from one platform to another. Fees accumulate, especially for short-term traders, so it is wise to analyze various fees charged on a platform and select one with low costs. The payment processor you choose to fund your account may also incur a charge. Brokers hold the coins for you, circumventing network charges, but they will charge commissions and inactivity fees.

Risks

There are a few risks associated with investing in Bitcoin Cash and cryptocurrencies in general. Being aware of the situation helps one to take the necessary steps to protect themselves from these risks. For starters, the crypto market is highly volatile, and prices can change overnight. A $10,000 investment can be reduced to $6,000 overnight.

 If you are a long-term investor and a BCH believer, this shouldn't worry you, as the asset will bounce back. But if you are a short-term investor, this can be alarming. In this case, you can consider hedging using the strategies described above, or you can diversify your investment with other coins to mitigate the downside.

Another risk associated with crypto investment is the lack of adequate regulations. This has passively allowed the existence of scams that steal from unsuspecting investors. It would be best if you did your due diligence to avoid falling for some of these scams. ETFs are regulated, so provide a great option for those wary of scammers. 

Additionally, your account and wallets can get hacked, and you can lose your tokens. Therefore, it's good to take all the necessary security measures such as setting a strong password, activating 2-factor authentication (2FA), and investing in a hardware wallet to minimize your tokens' chances of getting accessed by bad actors.

Payment Methods

Different platforms will support various payment methods. When selecting a platform where you can invest in BCH, you will have to go for one that supports the payment method you feel most comfortable with. A good investment platform should support many modes such as bank transfers, credit/debit cards, e-wallets, third-party payment processors, other cryptocurrencies, and so on.

Why Invest in Bitcoin Cash?

The cryptocurrency market has grown tenfold over the past year. Experts feel that digital assets are finally going mainstream, and there is plenty of evidence to support this view. Large institutional investors are no longer afraid of investing in digital assets, and are actively investing and accumulating various tokens. Mass adoption is expected to follow suit, and once this happens, many expect BCH to grow its market cap of $9 billion by ten times or even more. Based on the past trend, the current price of BCH could seem like a bargain a few years from now.

Summary of Investing in Bitcoin Cash

This guide has outlined the simplest ways to get into BCH investment and make the most of the asset. It's up to you to decide which strategy you would like to employ as each strategy offers different results. The end goal is profitability, and if you stick to the advice provided here, you should realize significant returns.

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