Why Bitcoin Cash Is Exploding Higher

By Pune Media On Oct 14, 2024 45

Bitcoin Cash BCH/USD is trading higher by 8.1% to $355.45 Monday afternoon following a surge in inflows into Bitcoin and Ethereum exchange-traded funds (ETFs) last week. This uptick, driven by shifting U.S. political dynamics that favor cryptocurrencies, saw Bitcoin and Ethereum ETFs accumulate a total of $407 million in new inflows.

What’s Happening: The turning point came after the U.S. vice presidential debate, which triggered a shift in polling toward Republicans, viewed as more supportive of cryptocurrencies.

Analysts suggest that this political backdrop, rather than traditional economic factors, played a central role in attracting the large inflows, particularly from U.S.-based investors. As Bitcoin and Ethereum rallied, Bitcoin Cash, a prominent Bitcoin offshoot, surged alongside them.

Bitcoin Cash, created in 2017 as a hard fork of Bitcoin to address scalability issues, has long benefited from periods of heightened interest in its parent cryptocurrency. As Bitcoin saw massive $419 million inflows and prices soared, Bitcoin Cash followed suit, benefiting from the so-called “Bitcoin effect.”

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Investors seeking to capitalize on Bitcoin’s bullish momentum often turn to Bitcoin Cash as a cheaper alternative that still holds historical ties to Bitcoin’s original vision of a decentralized peer-to-peer electronic cash system.

Why This Matters: The broader inflows into cryptocurrency ETFs, including the iShares Bitcoin Trust IBIT and the Fidelity Wise Origin Bitcoin Fund FBTC, also spilled over into the altcoin market. With the attention on Bitcoin’s performance, Bitcoin Cash emerged as an attractive option for those looking to diversify their holdings while staying within the Bitcoin ecosystem.

The allure of Bitcoin Cash’s lower transaction fees and faster block times, compared to Bitcoin, can further enhance its appeal during periods of market excitement.

The surge in blockchain equity ETFs, which saw their largest weekly inflows of the year at $34 million, added to the overall bullish sentiment across the crypto sector.

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Photo: Icons8_team from Pixabay

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