BCH/BTC to the moon?

Lots of crypto chatter over the last few weeks around the falling of Bitcoin (BTC) dominance this year from 60%+ to 53%+ as both alt coins and Ethereum (ETH) in particular continue to gain in market cap on a relative basis to BTC.

Ethereum and its hugely innovating applications across Defi and also ETH 2.0 has created a strong outperformance when compared to BTC. As the ETH “killers” continue to gain compared to both BTC and ETH there is a new entrant to the smart chain ecosystem that has the potential to take away market cap from its bigger brother and that’s BCH.

BCH now has its own EVM compatible smart chain called smartBCH and along with that has the benefits of the most powerful computer network in the World to secure it with BTC/BCH’s (dSHA256) sharding and secured by proof of work/hash rate. This keeps the democratic and secure “kill your kings” mining structure of proof of work and is extremely scalable. With BCH powering the gas fees on smartBCH, the time may have come to add more BCH to your portfolio.

Outside of being naked long BCH outright, another interesting way to express this view is to put on a long BCH, short BTC trade, betting on the BCH/BTC ratio increasing. If prices of both coins go up or down together (% wise), your position will be neutral (no profit or loss) but if BCH increases market share relative to BTC, the gains will be outsized. You can express this in the CoinFLEX perpetual futures contracts by buying BCH perpetual futures and selling the same dollar amount worth of BTC perpetual futures. On CoinFLEX you will typically earn more interest (from shorting the BTC perpetuals) than you pay in interest to be long the BCH perpetuals.

Having made an all time low below 0.01 a few weeks ago, BCH has been steadily climbing versus BTC on presumably the smart chain news (it’s live on testnet). This trade has the potential to probably reverse half its losses from the peak of its relative cap to BTC (0.2) in 2017 by ralling to 0.1 by end of the year, which is a 5x return from here. If you expressed this view using perpetual futures on CoinFLEX, you also tend to have significant funding benefits too with you getting paid on the short BTC perp swap at a far higher rate than you pay on the long BCH perp swaps.


Cofounder, CoinFLEX. All opinions my own.