Bitcoin Cash (BCH) Prices Experience Bump Ahead of Upgrade

Overview

Upgrades within a blockchain network are notable events that often introduce new features, deploy more use cases, garner traction through news media, foster mainstream adoption, and in most cases influence price actions of the native cryptocurrency of that blockchain. 

There have been several upgrades in diverse blockchain networks, from the inception of cryptocurrencies — starting with Ethereum’s The Merge in 2022 to Binance Smart Chain’s Bruno upgrade, and even Bitcoin’s Taproot upgrade in 2021.

The reason for the Bitcoin Cash token’s recent pump seems to be connected to its most recent upgrade, and your curiosity is about to get satisfied as you uncover this possibility in this article. Let’s go!

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Understanding the BCH Upgrade

The Bitcoin Cash (BCH) upgrade is a hard fork that was executed on the 15th of May 2023. Since hard forks involve making changes to the underlying rules and consensus mechanism of the blockchain, this upgrade intends to onboard over 1000x efficiency into the Bitcoin Cash’s blockchain network, according to Dev (Jason Dreyzehner).

This upgrade has been talked about by the majority for its user-centric improvement, and price action impact. Users have to do nothing to be a part of it, although Devs did the most at that time. 

The Bitcoin Cash upgrade stands on pivotal legs;

• CashTokens, 
• Allow transactions to be smaller in size,
• P2SH32, and 
• Restrict Transaction Versions.

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The first is an improvement on the CashTokens which allows advanced abstraction in script and covenant designs, as well as conventional token and NFT use cases. The Bitcoin Cash Improvement Proposal (CHIP) known as the CashTokens CHIP, gives room for higher-security vaults, decentralised exchanges, and bridged sidechains. This is expected to bring myriads of advancements that will upscale the capabilities of the network.

Second is the allowance for transactions to be smaller. It cuts off confusion within transactions (On-chain) and prevents a hash grinding attack, where SPV (Simplified Payment Verification) wallets can confuse a 64-byte transaction for a Merkle node.
The third is P2SH32, which allows for more cryptographically secure transactions and potentially prevents attacks. Fully known as the “Pay-to-Script-Hash-32” alteration, the P2SH32 allowance deploys an advanced address format exclusively designed for smart contracts.
The Restrict Transaction Versions blocks ensure that transactions are now based on the version number (Which could be 1 or 2). Every transaction block that contains transactions that defy this rule will be swiftly invalidated.

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Impact of Upgrade on Price

The Bitcoin Cash token was trading at $112 just the weekend before this upgrade, and upon entering the upgrade week (I.e. from 14.05.2023), we saw market volatility playing out and $BCH climbed up to $114. When the upgrade day came, $BCH was already trading at over $120 in less than 15 hours. The price action had just printed a +6% on $BCH from the opening of the daily candle to the closure of the daily candle wick.
At the exact time of the upgrade (1:24 PM UTC), $BCH was already down to $118 and gradually closed the hourly candle at about $117. 

Summarily, since investors were aware of the upgrade (Days before), they simply aped into the project and drove the price to a +6% height. After the upgrade, the price of $BCH came down. The news about the upgrade had just triggered market volatility, and investors should always be on the lookout for such news to avoid wrong investment moves.

Impact of Upgrade on the BCH Ecosystem

The impact of any blockchain upgrade can vary depending on the nature of the changes implemented, the response from the community, and the adoption by users and businesses. 

This particular upgrade, just like major blockchain upgrades, introduced improvements, addressed technical limitations, and also added new features to enhance the overall functionality and user experience of the Bitcoin Cash blockchain.

This upgrade enables the blockchain to use smart contracts which would employ more efficiency than that of Ethereum. Furthermore, UTXO tokens will be created to serve as representations of diverse digital assets on the Bitcoin Cash network
With major exchanges like Binance showing support for the upgrade, investors would find the token worth investing in – since it is not only seen as a twin replica of Bitcoin, it is also becoming a leading crypto with great utility. Just like Bitcoin in the case of its BRC-20 token possibility and NFTs, Bitcoin Cash is also leading an innovative use case that would host the interest of developers, traders, investors, and a community of optimistic individuals in its ecosystem. 

Frequently Asked Questions 

Does This Upgrade Mean Bitcoin Cash Is Going to Use Smart Contracts?

In summary, yes! Think of Ethereum Request Comment (ERC-20) tokens and ERC-721 (NFTs) as they are being used on the blockchain — from snapshots, DAOs, Metaverses, and GameFi utility. The Bitcoin Cash blockchain upgrade makes these and other on-chain use cases seamless.

Where Can I Trade $BCH Tokens?

$BCH is currently available in most crypto exchanges and you can buy or sell on Binance, KuCoin, Bithumb, Kraken, and Coinbase. As of the 1st of June 2023, $BCH is trading at $113 per token with a maximum supply of 21 million $BCH, just like Bitcoin.

What Prices Could $BCH Attain in the Next Bull Run?

The price levels that $BCH can attain is premised on its market demand and supply in the financial market. The $BCH token once had an all-time high of $4,355 according to CoinMarketCap and could see more highs as its thriving community engages the blockchain. As at 1st of June 2023, it is currently trading below $120 which is close to its lowest point of $75 in 2017. Major crypto analyst expects $BTC to make new all time high, and this could be a possibility for $BCH also. So, going by this metric, $BCH could be trading above $4.5k in the coming bull run.