So, you want to trade Bitcoin Cash (BCH) in the hopes of making money. The idea is simple when trading: buy low, sell high. Yet whilst the idea is simple, the execution of such is much more complicated.
There are a few different ways to trade Bitcoin Cash. You can swap it for other altcoins or you can even margin trade on Bitfinex or Bitmex if you’re feeling lucky. Here is how to trade Bitcoin Cash and some tips for doing so.
Bitcoin Cash is a fork of Bitcoin due to a disagreement over a scaling solution. BCH has chosen to create larger blocks in an effort to make BCH “peer to peer electronic cash” that is widely useable.
Trade Bitcoin Cash for other alts?
Bitcoin Cash is one of the biggest altcoins there is currently. Whilst some may argue that it isn’t an altcoin, the market would suggest otherwise. That being said Bitcoin Cash has been a very profitable swing trade for many.
Now that BCH has reached a certain level, the cryptocurrency can generally be relied upon to maintain a consistent peg with Bitcoin. If the coin begins to drop a way behind Bitcoin, you can expect it to soon rise up again and vice versa. Whether BCH will ever decouple from Bitcoin remains to be seen. The market of altcoins has remained coupled to Bitcoin for many years now.
As Bitcoin Cash is one of the major altcoins, it is possible to make some quick swing trades with the smaller marketcap coins as well. Due to less, liquidity these cryptocurrencies can be more volatile than the larger marketcap coins such as Bitcoin Cash.
Many exchanges offer Bitcoin Cash trading pairs including Binance and Poloniex, so you don’t need to trade your BCH for Bitcoin to make a trade. Instead you can directly trade Bitcoin Cash for your altcoins.
There are, of course, many parameters that you need to be aware of before making such a trade. Is Bitcoin Cash looking bullish or bearish? How do you expect the altcoin to perform as well?
In a bull market, these trades can be relatively easy if every cryptocurrency is rising in price. However, even if you make more in terms of dollars it doesn’t necessarily mean it was a good trade. Keeping your holdings in BCH might have earned you even more.
Trading Bitcoin Cash for goods
Perhaps you don’t want to flip altcoins with your Bitcoin Cash. There are alternatives things that you can spend your BCH on. One of the key features that the Bitcoin Cash community push is that BCH behaves as cash. Therefore you can spend it very easily.
Bitcoin.com offer a marketplace where you can buy a variety of merchandise and goods to show your support for BCH. They don’t need to accept Bitcoin for these goods either.
There are numerous other retailers that accept Bitcoin Cash. Roger Ver has been driven in pushing outlets to accept BCH as part of the marketing behind the cryptocurrency.
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.
As BCH is one of the major cryptocurrencies there are clearly a wide variety of ways to trade it, either for goods or in an attempt to make more money. Whilst Bitcoin maximalists may deride BCH, many altcoin traders continue to trade it consistently.
Whilst there are many traders, there are also just as many hodlers that have chosen to avoid trading in the hope that the price will rise in the long-term. This is a much easier method of playing with cryptocurrencies and less risky, but there are no guarantees. Anyone who says otherwise is most likely trying to scam you.
To find out more about Bitcoin Cash and other altcoins, download our definitive guides.