How to Trade Bitcoin Cash

How to Trade Bitcoin Cash

Table of Contents

The cryptocurrency market is now crowded with multiple altcoins, and it is difficult to figure out what to choose or not. Currently, Bitcoin is one of the most popular altcoins, and it is one of those cryptocurrencies used for purchasing products. On the other hand, Bitcoin Cash (BCH) is made to make it the most successful peer-to-peer electronic cash. 

It is well known to the crypto community that you have to buy low and sell high to earn a profit while trading, but it is not easy to directly buy or sell cryptocurrencies like other asset classes. So what if I tell you the process of getting exposure to Bitcoin Cash or any other cryptocurrency without even actually owning it? 

Yes, this trading method is widely accepted by crypto traders across the world. In this article, we will learn how to trade Bitcoin Cash without actual ownership and make huge profits even more than those who own it. Let’s get started. 

Some Interesting Facts about Bitcoin Cash

Bitcoin Cash is a hard fork of the popular cryptocurrency Bitcoin, resulting from the actions to scale the cryptocurrency. There was a disagreement over the scaling solution for Bitcoin due to which the fork was made out of the split blockchain of Bitcoin. To counteract the issue over the scalability of Bitcoin, Bitcoin Cash was introduced.

Bitcoin Cash has undoubtedly become one of the go-to digital currencies that attract traders, and it has also been lucrative enough among many novices worldwide. 

In 2017, when Bitcoin Cash was launched, the value of the digital currency was about $240, and at the same time, the Bitcoin value was $2700. Thus, the value of Bitcoin Cash increased almost two times in just one month. This kind of jump in value can rarely be seen in the world of asset classes.

There were many times when people chose Bitcoin Cash over Bitcoin due to its advanced technology. As a result, Bitcoin Cash hit an all-time high of $3,785.82. BCH has been an all-time favourite also for profit-seeking cryptocurrency miners. 

Experts advise investors to stick with the two most well-known cryptocurrencies, Bitcoin and Ethereum and avoid altcoins such as Bitcoin Cash.

So coming back to how we can trade Bitcoin Cash without owning it. 

Trading Bitcoin Cash CFD

Contract for differences or CFDs refers to the contract or an agreement that pays the difference due to price movements of the underlying trading instrument. CFDs allow you to trade on a pre-determined price of an instrument and earn the profit over the difference of the settlement price. Trading Bitcoin Cash CFDs is very simple as you just have to open a trading account with a good CFD broker. 

Rather than taking the position directly in the market and trading the asset by owning it, you can get exposure to the asset without owning it. But how you can trade Bitcoin Cash CFDs quickly and effectively. Here are some simple steps. 

  1. Open your preferred trading account from various account types with a well-regulated CFD broker like Capixal
  2. Fund your account with the preferred deposit amount.
  3. Buy and sell Bitcoin Cash CFDs with one-click operations.

Traders can trade a contract for difference (CFD) on a particular cryptocurrency and speculate on the price difference. A CFD is a type of contract, typically between a broker and an investor, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade. This is considered a short-term investment as CFDs are used within shorter time frames.

When you buy bitcoin cash on an exchange, the price is usually quoted against the US dollar (USD). In other words, you are selling USD in order to buy one unit of bitcoin cash. If the price of bitcoin cash rises, you will be able to sell for a profit, because it is now worth more USD than when you bought it. If the price falls and you decide to sell, then you would make a loss.

Investing in Bitcoin Cash CFDs gives you the opportunity to trade BCH in both directions. You can either hold a long position, speculating that the BCH price will rise, or a short position, speculating that the price will fall. Therefore, regardless of having a positive or negative view of the future of the Bitcoin Cash price, you can try to profit from both upward and downward fluctuations.

For instance, to participate in the BCH trade through CFDs, you can speculate on the BCH/USD pair.

Benefits of Trading Bitcoin Cash CFDs

There are multiple benefits of trading Bitcoin Cash CFDs over the traditional trading methods. It is necessary to make the best out of your trading journey to earn a decent profit from Bitcoin Cash. CFDs can do the same for you in an effective and quick way. Let’s discuss the several benefits of trading Bitcoin Cash CFDs. 

There are significant variations between purchasing a cryptocurrency and trading a cryptocurrency CFD. When you buy a cryptocurrency, you put it in a wallet. Trading CFDs, on the other hand, stores the product in your account, which is controlled by a financial body. When you buy CFDs, you don’t have to worry about being linked to an asset because you’re only buying the underlying contract.

  1. When you trade CFDs, there will be an uncompromised safety to your funds as a broker like Capixal keeps your fund in a segregated bank account.
  2. Just like trading Bitcoin Cash CFDs, you can trade various other cryptocurrencies. 
  3. You can trade Bitcoin Cash and any cryptocurrency 24/7. There is no specific time when the crypto market opens or closes. 
  4. There will be no hidden fees or charges while trading CFDs on cryptocurrencies with reputed brokers like Capixal. 
  5. In crypto CFD trading, you can trade cryptocurrencies against fiat currencies such as USD, EUR, AUD, JPY, etc. 
  6. You can limit your risks up to a higher proportion. Using stop and profit loss levels, you can determine the maximum amount you are willing to lose.
  7. You can trade CFDs using leverage that helps you in a lot of ways. You can open a very strong position in the market by using leverage. But always aware of the associated risks to it. With the help of leverage, you can gain exposure to the broad market. 

Leverage trading

If you fancy yourself as more of a day trader, you can head on over to Bitmex or Bitfinex and take part in some more risky trading by longing and shorting Bitcoin Cash. You can use leverage through this, but the risk associated with this kind of trading is much higher and so are the profits.

Very few people are actually profitable from this type of trading. Learning the skills, patience and emotional stability required is time-consuming. Unfortunately, many people dive into this type of trading before they are ready and become “rekt”.

Before taking part in this kind of trading, research and practice is essential! In all cases of trading Bitcoin Cash never risk more than you are willing to lose.

Bitcoin Cash in the Markets

The offshoot cryptocurrency was launched and was worth $240, whereas Bitcoin was at that time worth $2700. In one month it had more than doubled in value. Since then the young digital currency has more than tripled itself and hit an all-time high of $3,785.82 and a low of $76.93. 

As with others, this one sees spikes on news events like being accepted onto large exchanges, and when Bitcoin has a hard time, sometimes people have switched to BCH for its scalability and advanced technology.

But Bitcoin Cash got off to a slow start in the beginning. If it was not for the Bitcoin Cash mining algorithm breathing life into the new instrument, it would not seem as attractive to profit-seeking computer miners.

Once the finance markets got wind of this jump and rise in the rate at which the ‘blocks’ were being produced (known as hash rate), traders and investors started to bid up the BCH price, hence its rise in popularity. But now prices are still dropping and this is said to be as a result of poor conditions for its miners (low rewards) and fears over the security of this new technology.

5 Facts You Should Know About Bitcoin Cash

  • Created from a hard fork of Bitcoin and expected to have quicker reactions to transactions, the Bitcoin Cash fork occurred at block 478,559.
  • Despite its reasons for creation and its origins, the BCH coin is considered an altcoin for now. It is not Bitcoin and has no direct connection to Bitcoin’s value.
  • Having said that, Bitcoin Cash is its own currency and is useful in that it functions just as Bitcoin does only faster due to the increase in its block size.
  • When the hard fork occurred, the coin held no value at all and investors were able to gain ‘free coins’ – from the split of Bitcoin. As in this case, Bitcoin Cash saw major changes in the market and managed to secure its place in the ‘top coins’ listing by market cap in November 2017.
  • Investors have speculated that Bitcoin Cash was created only because high fees and slow transactions would destroy Bitcoin, and not because Bitcoin was reaching its maximum output of blocks.

Traders can trade with confidence, knowing that there will be no market disruptions or malpractices. The trade is conducted entirely online, with dealers using e-wallets to hold cryptocurrencies for safe transactions. By checking the transactions, the programme ensures a secure trade.

Traders are validated using algorithms in cryptography, which means traders have security because there is no double-spending and transactions are protected. By documenting trades, blockchain technology, on the other hand, makes commerce transparent. It functions similarly to a ledger, storing all transactions and making them publicly available in blocks to investors. 

However, traders should be aware that these do not display the traders’ names, but rather the traders’ key code. As a result, each trader’s key code is personal and should be kept confidential.

Furthermore, cryptocurrency is a decentralised market that is free of government or central authority intervention. As a result of its services and digitalisation aspects, bitcoin trading is highly secure and has promising market prospects in the near future.

Bottom Line

A cryptocurrency is a digital asset conceived for use as a medium of exchange, which uses cryptography to secure transactions, control the supply of additional units and corroborate transfers. In short, cryptocurrency is a decentralised electronic currency.

Bitcoin Cash cryptocurrency was launched in August 2017 as a result of a hard fork of the Bitcoin blockchain. It was created by a group within the Bitcoin community looking to re-establish Bitcoin’s initial promise of peer-to-peer electronic cash.

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