What is Bitcoin Cash?
Bitcoin Cash is derived from and is also a direct competitor of Bitcoin. It was created in August of 2017 thanks to a “hard fork” in Bitcoin’s blockchain. This was done as an attempt to slow down the amount of transactions on the network as its number of users increased.
Each block of Bitcoin Cash is about 8MB, whereas blocks of regular Bitcoin are only 1MB. This means that the Bitcoin Cash blockchain can allow up to 24 transactions per second and gives it very low transaction fees. These two advantages allow Bitcoin Cash to compete with its predecessor, who had previously established itself as the most popular of all cryptocurrencies.
Also, thanks to a Twitter post by Roger Ver, we have learned that the developers of Bitcoin Cash are working on making the cryptocurrency available via Visa credit cards to make it more accessible around the world.
How Does Bitcoin Cash Work?
No matter which cryptocurrency, it’s risky business to try and make you way through the financial sector. The cryptocurrency market, in general, is known to be rather volatile sometimes. This is due to it not being regulated by any central banking authority and is exactly why experts recommend caution for anyone who wants into the market.
However, it isn’t all that difficult to way a place for business in the world of Bitcoin Cash. You simply must be patient and conduct thorough research about the market to know when to buy and when to sell.
Most experts do not see Bitcoin Cash as a huge risk. They see a bright future for it and believe that investing in Bitcoin Cash is like investing in one’s future.
How to Buy Bitcoin Cash
There are some that consider this “the true Bitcoin and for those who are looking to get in on the action, we’ve compiled a few strategies that might help when trading Bitcoin Cash.
Buy Low and Sell High
The simplest and most effective strategy for making money with Bitcoin Cash is to buy it at a low price, wait a few days and then resell it to make capital gains. This is also known as short-term trading. This type of trading does, however, require constant analysis work and has two golden rules to live by. The first is to never buy Bitcoin Cash in a period of rising value and the second is to never sell in a period of decline. The hardest part about this type of trading is trying to predict the upward and downward trends of the currency, while also considering the volatility of the market.
Medium and Long-term Trading
It is also possible to make money with Bitcoin Cash by keeping it for longer periods. Many medium or long-term traders keep their Bitcoin Cash for several months or even years before reselling them. This strategy requires a higher level of investing since you will need to do a very thorough study about the cryptocurrency to see whether it will be worth more in the future. It is also a recommended method for those who are newer to cryptocurrency trading. It is important to monitor trading platforms and even social media networks to be able to gain insight into the way that the cryptocurrency is evolving. With a total capitalization of 44 billion, it is one of the more favored encrypted currencies which tend to attract the more advanced traders.
This is the most condemned trading method for newer cryptocurrency traders. In day-trading, the investor seeks to buy and sell Bitcoin Cash on the same day and walk away with a profit. The well-known volatility of the market can make this type of trading extremely difficult. This method should therefore be left for professional with plenty of experience.
According to ICO Mentor’s definition, “An ICO (Initial Coin Offering) is a fundraising method, operating via the issuance of digital assets exchangeable for cryptocurrencies during the start-up phase of a project”. The structure that is planning to launch an ICO will issue digital assets call “tokens” and then anyone who is interested in the project can buy the new asset by exchanging them for Ethers or Bitcoins. In November, Roger Ver suggested that companies who are launching ICOs should also start accepting Bitcoin Cash and other cryptocurrencies. Those who acquired the new tokens can subsequently sell them on exchanges at rates determined by the laws of supply and demand, as well as the overall success of the project.
Where to Buy Bitcoin Cash?
To buy or invest in Bitcoin Cash, one of the first things to do is to choose an investment broker who offers cryptocurrency trading services and, of course, Bitcoin Cash. You can refer yourself to the table presented above to get an idea of what brokerage firms are available. We recommend not only considering the ratings and minimum deposits, but also reading our opinions on each broker.
Here are a few criteria to consider when choosing a broker.
This is the first and one of the most important factors to check. This will let you know if your investments are safe from scams or any other types of abuse. If your broker is based in the U.S., it should be accredited by the Commodity Futures Trading Commission (CFTC). Whereas if your broker is based out of France, it should be registered with the AMF. It is also a good idea to check out the opinions of other investors to get a better idea.
Once you are sure that the broker meets regulations and is credible, you will then analyze their offers to see if they will allow you to make significant gains on your investments. Another way to see this is to gauge the difference between the acquisition price and sales price of your Bitcoin Cash. If the difference is high, we suggest that you choose another broker since it will not allow you to make enough profits from your Bitcoin Cash transactions.
eToro is an online broker that offers you to ability to make a demo account. Alvexo, another online broker, even has a limited risk feature. This type of demo account allows you to simulate trading and practice your skills. When you are new to cryptocurrency trading, it lets you adjust to the rules before you start investing with real money. Otherwise, without practice, the risk is much higher of lose given the instability and volatility of the market.
As the number of different cryptocurrencies keeps growing, so does the number of online brokers. This is one more reason to take the time to make sure the information about a broker is real and true. It is always a good sign if your broker works with reputable banks and financial institutions. Any cryptocurrency needs considerable leverage – at least 100:1 – to be profitable. Since this represents a considerable amount of money, it is important to do thorough and extensive research before making any decisions.
Most online brokers will offer some sort of assistance to their customers. It is a good idea to compare several brokers to see which one offers the best customer support for your personal needs and expectations. We recommend analyzing the responsiveness and reliability of their customer support system. It is important that brokers make efforts to ensure that their traders make capital gains on their investments since the market can change in an instant and they could potentially lose significant amounts of money. The community aspect offered by a platform, such as eToro or CEX.io, is another important factor to consider when looking at brokers.
It is very important to make sure that a broker is regulated. In fact, it is crucial to make sure that your investments take place in a secure setting which ensures the safety of your money. Transactions should always be monitored and guaranteed by at least one regulatory body. Accredited brokers must always comply with provisions put in place with the aim of protecting their client’s investments.
For example, there is often a minimum deposit that is required for regulated online brokers, as well as a “net capital rule”. As a result, brokers have an obligation under the law to maintain a minimum level of liquidity capital. The purpose of this being to anticipate to possibility of bankruptcy on the broker’s end and to offer a guarantee to its clients. Regulated brokers must also comply with keeping their client’s investments in a separate account from their own. The objective of this is to prevent the broker from using its client’s funds for anything other than serving their interests.
When you choose to invest with a broker, they become an intermediary for all your transactions. Therefore, it is necessary that they have to know-how to ensure that you make capital gains on your investments. By using a demo account or any other similar feature, you will be able to get an idea about the broker’s expertise. You must also pay attention for other features that will allow you to analyze the market. This could include features such as real-time graphical representations, trading signals or trading calculators that help evaluate your investments. Any continuous flow of up-to-date information and opinions on market developments is always a benefit to the platform. On Alvexo, for example, there is even an economic calendar that offers an updated list of events and information about the stock market.