Bitcoin Cash (BCH), arguably the most prominent of all of the bitcoin hard forks, has experienced a bit of a price stall in recent months. A report by Cryptovest highlights how BCH climbed above $3,500 briefly after its first appearance on popular digital currency exchange Coinbase, but then fell down below the $1,000 level. BCH has had a very hard time climbing back up over that boundary. Indeed, it remains stuck at around 0.1 BTC in value; as of this writing, it is just below $700 per token compared with BTC at about $6,400. Like virtually all other digital currencies, BCH has fluctuated up and down for some time, but it has generally remained stagnant overall. Here are some potential reasons why.
BCH Mining Problems
The profitability of BCH mining as compared with BTC mining has been lower for long periods of time, according to the report. And when BCH mining has taken the lead as the more profitable venture of the two, the margin has been incredibly slim. This may be related to the prevalence of Bitmain pools used to facilitate bitcoin cash mining, which offers lower levels of profitability than some alternatives. Unfortunately, if mining is not competitively profitable, there is very little incentive for miners to focus their attention on BCH.
BTC-BCH Trades Fall
Early on in the lifetime of BCH, it was common for investors to trade BTC and BCH directly, establishing trust in one network or the other. Now, though, there are generally fewer direct trades between these two coins, at least when it comes to jockeying for price dominance. One reason for this may be tether (USDT), the intermediary token. By trading against USDT, investors can bide their time during turbulent periods with fiat-like tokens that do not fluctuate. For this reason, tether trading makes up about 75% of BCH volumes at this point.
BCH as Altcoin
A third reason for BCH's sluggishness could be the fact that it is an altcoin. Although vendors have slowly started to adopt BCH payment methods, there are few new and exciting reasons to invest in BCH. Traders remain cautious, as they do with many altcoins that compete for a limited pool of attention, and volumes have remained low. Besides, with bitcoin fees lower than they have been previously, the network is once again accessible for many investors, and they are less likely to focus on BCH instead.
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