How To Buy Bitcoin Cash | Ultimate Guide To Buy BCH
Bitcoin Cash (BCH) is one of the largest and most popular cryptocurrencies in the entire crypto industry. Ranking at the fifth spot on the list of largest currencies by market cap at the time of writing, Bitcoin Cash has a market cap of over $3.99 billion.
It came to be as a hard fork of Bitcoin itself, back in 2017. Back then, a group of developers did not approve of the direction Bitcoin was taking, so they decided to create a fork that they would run in a direction they thought was proper.
5 Steps to Buy Bitcoin Cash with eToro Now
Buying any cryptocurrency with eToro is easy, simply follow the steps below:
1Sign up for free with eToro, entering your details in the required fields.
2Fill out the questionnaire, this is both educational for you and eToro.
3Click 'Deposit', you'll then be asked how you want to fund your account.
4Choose your required payment method, follow the simple steps to link your payment.
5Enter the amount you want to deposit and you're good to go!
Our Recommended Platform to Buy Bitcoin Cash
If you already know all there is when it comes to how to buy and sell Bitcoin Cash, then you can probably skip the next several sections of this guide. Instead, you might just want to know which platforms are the best for buying, selling, or trading coins.
If that is the case, here is our list of the best platforms that you might want to consider.
If you are a newcomer to the crypto industry and you need a bit of help regarding BCH, we can help you out with that, as well. Keep reading, and you will all there is about how to handle the fifth-largest coin.
Where to Buy Bitcoin Cash in 2021
The first thing to note about making a profit off of Bitcoin Cash is that there are two ways to do it. They might seem similar at first, but there are a few very important differences.
You can choose to buy and own the coin, or to profit from its price movements. Both are rather simple, although you might find the concept of buying and owning the coin more familiar. Simply put, you buy BCH, you store it in a safe place, and you hold it, waiting for its price to grow. Once it happens, you sell it and make a profit.
Alternatively, you can make a smaller profit but do it much faster, by trading derivative contracts, such as futures contracts or Contracts For Difference (CFDs). In this scenario, you don't actually buy coins, but rather bet on which way their price will move. If you are correct, you make a profit, and that is that.
Both approaches have their positives and negatives. Buying coins means that you need to prepare a safe place to store them, as you are in charge of their security. Also, if the price drops, instead of growing, you will see losses.
Betting on the price movement also carries the risk of loss if you make a wrong prediction. Plus, there are extra fees that you need to pay to your brokers, whom you need to open an account with. In the end, it all depends on what kind of a trader you are, what your strategy is, and what you, yourself wish to do.
Now, let's see what you need to do in order to utilise these methods of purchasing Bitcoin Cash. We will cover both, working with brokers, as well as the other method of buying actual coins from an exchange.
How to Buy Bitcoin Cash With a Broker
The first method is buying BCH with a broker. Brokers are basically services that allow you to open an account, deposit your funds, and then use those funds to bet on price movements or even buy cryptos, in some cases.
The most important part is to select the best one for you, based on fees, security, available payment methods, and other similar aspects that might have an impact on your overall experience. You should also make sure to only work with regulated and certified brokers to avoid scammers who might just be trying to trick you into giving them your hard-earned money.
After that, here are the steps that you need to take.
1. Register With the Broker
The first step after finding a broker is, of course, to register with them and create an account. This is easy enough to do, and there are plenty of great platforms to choose from.
Some, like eToro, only need you to enter your email, select a password, and come up with your user name, and that's it. Others, like Pepperstone, don't even need that. They allow you to log in with your Facebook profile, and with that, you are ready for the next step, which is:
2. Verify Your Identity (KYC Process)
The next thing that you need to do is verify your identity. This is important, as it ensures the safety and security of both you and the broker. If your broker is regulated, it is obligated by the law to impose this procedure. That way, it can help prevent criminal activities, such as money laundering, which has grown to be rather problematic since the crypto industry has boomed.
However, you shouldn't worry, the procedure doesn't involve much more than you delivering photos of the documents that the broker asks you to upload. Depending on the broker, you may have to upload only a photo of your ID, or multiple different documents that would confirm your identity. So, what you have to deliver depends on which company you choose.
3. Deposit Funds With Your Preferred Payment Method
Once your account is created and verified, you will be ready to deposit money and start using it for making more money. Now, since not all brokers support all payment methods, you should also remember to check if the broker offers the payment method you prefer while you are choosing the service to join.
Keep in mind that different payment methods come with different advantages and disadvantages and that there are multiple things to consider. That includes the speed of transactions, associated fees, and, of course, the security of each payment method.
4. Open a Position to Long/Short Bitcoin Cash
With your money deposited in your account, you are ready to start using the broker's services in full.
One thing to note here is that some brokers, such as eToro, also allow you to buy coins and officially own them. You don't have to go to the Bitcoin Cash exchange for that. However, there are also those that don't, and if you chose them, you will likely only be able to buy Bitcoin Cash-based CFDs and futures.
All that remains now is to figure out what kind of position you wish to open. That will depend on your expectations of BCH's future price behaviour. If you expect that the coin's price will drop, you will want to go short, and bet that the price will fall. If you are right, you will make a profit.
If you expect it to grow, you will want to go long, and bet on it increasing. Once again, the accuracy of your prediction will earn you money, while the opposite price movement will result in losses.
You can minimise these losses by introducing a number of safety measures, such as stop-loss or trailing stop-loss, and other orders. This means that you would select a price above or below the price the coin has at the moment when you open a position and turn that level into a sort of safety net.
It works like this: If you bet that the price of BCH will grow, you should select a level below the entry price and instruct the broker to immediately close your position if the price starts dropping, and it hits this secondary level. Considering the volatility and unpredictability of the crypto industry, it is recommended that you use these precautions, just in case.
5. Close Your Position
As mentioned, your position can be closed automatically if the price starts moving in an unwanted direction, and it triggers the safety measure. This will result in losses, although your losses will likely be minimal, as compared to the price freely dropping until the next time you visit the platform.
Alternatively, you can always close a position by hand if you decide that it is the right time for it. If you keep a close eye on the market and you deduce that BCH has gone as far up as it could and that a correction is soon to follow, this is the right time to close your position and walk away with the money you have earned up until that point.
How to Buy Bitcoin Cash With an Exchange
If you want to buy Bitcoin Cash and hold it on your own, then you will want to go and do it on a crypto exchange. As mentioned, there are brokers that will let you buy it while using their services, but exchanges are typically where people go to buy and trade coins, so you are likely to get BCH much easier and faster there.
Once again, choosing an exchange platform is the most important step, where you will have to consider fees, security, whether or not it is regulated, and alike. Also, make sure that the cryptocurrency exchange supports your preferred payment method, and that it services your area.
Given that we are discussing Bitcoin Cash, you likely won't have a problem finding an exchange that offers this coin, since it is rather popular and listed pretty much everywhere.
With that out of the way, let's see how you can use it and what you need to do to get your hands on some BCH coins as quickly as possible.
1. Set up a Bitcoin Cash Wallet
The first step is to prepare safe storage for your BCH coins. This is one of the downsides of owning your own coins — you are also the one who needs to secure them. On the upside, once you do — no one can take them away from you, freeze your account, and alike.
So, before you start buying coins, you should first set up a wallet that supports Bitcoin Cash, and then you can proceed to the exchange.
2. Choose and Join an Exchange That Sells Bitcoin Cash
Naturally, before you go to the exchange, you will first have to select the one you wish to use. As always, we advise selecting a reputable platform that has been around for years, rather than a shady-looking exchange that did not exist two days before, and that hides all the information about its owners and team.
There are plenty of trustworthy platforms to choose from, such as Binance, Coinbase, Coinmama, CEX, and more. Just figure out which ones serve your region, which one is the best in terms of fees and alike, and make your account.
3. Choose Your Payment Methods to Buy Bitcoin Cash
At this point, you should choose a payment method that you wish to use for buying coins. Most exchanges support multiple different payment methods, such as cards, bank transfers, and alike.
You should find one that you are satisfied with but also keep in mind things such as time, cost, and convenience. For example, credit cards offer fast transfers, but they come with high fees. Also, they allow you to buy coins even if you don't have money at hand, but you will have to pay back the money you used later on.
Debit cards only let you use the money that you do already own, so you won't have to fear going overboard with your investments. Like credit cards, they are fast but can be expensive. Bank transfers are much cheaper, but also take a longer time for your money to get to the exchange and complete the purchase.
4. Place an Order to Buy BCH
After figuring out your payment method, you will be ready to start buying coins. Simply look for the 'Buy Coins' button, or some version of it, depending on how your exchange of choice has decided to name it. Click on it, and you will be transferred to the buy screen.
Here, you need to select the coin you wish to buy, the amount, and enter your payment details. That's all there is to it, and after you click the 'Buy' button, your coins will be yours.
5. Safely Storing Your Bitcoin Cash in a Wallet
As mentioned, in order for your coins to truly be yours, you should withdraw them from the exchange into your personal crypto wallet. This is the safest way to handle cryptos, as exchanges can be hacked, they can freeze your funds, suddenly shut down, or have their site crash. If any of this happens, your coins will be out of your hands.
You don't have to transfer your BCH away from the exchange if you don't want to, but it is recommended that you do. Only keep the small amounts that you plan on trading within the exchange's own wallet.
Should You Buy or Trade Bitcoin Cash?
There is no right or wrong answer here; there is only your intention and strategy. If you wish to own coins, you should buy them. This is a good method for long-term investors, who don't mind waiting for a longer period.
If you don't want to own crypto, or if you want to make a quick profit, you can simply trade Bitcoin Cash derivatives, and bet on the coins' price movement, as we discussed above. Buying and trading coins is best done on an exchange, while BCH brokers are the place to go for trading derivatives.
What's the Difference Between a Bitcoin Cash Exchange and a Broker?
To summarise, crypto exchanges allow you to quickly purchase or trade coins and own actual cryptocurrency, which you can then withdraw and store or use. Some brokers let you do this too, but the majority of them are there for contracts that only use BCH as an underlying asset.
These days, both types of platforms are mostly regulated and rather safe, so the big question is whether you want ownership of the coins or just a quick profit.
Long vs Short Term Investment
Long-term investments are a good way for you to invest in the future. They revolve around buying a certain amount of coin — provided that you expect that it has the potential to see price growth in the future — storing them somewhere safe, and forgetting about them for a while. If you do this, you should expect to keep them locked up for a long time, maybe even years.
The downside here is that you are responsible for their security and management.
Short-term investing may involve using CFDs and futures, as described earlier, or buying coins with the intention of profiting off of smaller price fluctuations.
Pros and Cons of Buying Bitcoin Cash
- Peer-to-Peer Exchange: Bitcoin Cash is among the few cryptocurrencies that have dedicated peer-to-peer exchange. LocalBitcoins allows you to quickly sell or buy Bitcoin Cash from other users using fiat currency. All you need is to deposit your money, place an order or select an order you can afford.
- Fast transactions: Though Bitcoin increased its block size to 2MB, it still lags BCH’s 8MB transactions speeds. In essence, Bitcoin Cash process transactions four times faster than Bitcoin.
- Market capitalisation: Investing in an established cryptocurrency is more secure than in new ones. It gets better if the currency is among the top altcoins in the world. Bitcoin Cash is not one of the oldest cryptocurrencies, but its adoption and value show that it is a valuable digital asset.
- Miner’s choice: Mining cryptocurrencies is difficult, and so miners are always looking for coins that can make money in a shorter time or with fewer resources. Bitcoin Cash allows miners to make profits faster than Bitcoin due to its block size. For this reason, most miners have moved from BTC to BCH.
- Possible monopolisation: Bitcoin Cash is supposed to be a decentralised network with no specific entity having sufficient power to control other miners or the coin’s future. However, this has been an elusive dream. Three mining pools contributed to about 51% of the total BCH coins in 2019. Such a scenario is scary as it limits the future of the altcoin to these mega pools.
What Fees Are Involved in Buying Bitcoin Cash?
There are different types of fees that you’re likely to encounter when trying to buy Bitcoin Cash. We’ve listed the main fees below;
- Transaction fees: Every transaction on your chosen Bitcoin Cash platform will require a transaction fee. This is actually the same in the fiat currency world also, but the fees are normally passed to the business, rather than the customer. In the cryptocurrency world, there are no businesses, and all of the transaction fees are shared amongst every single customer.
- Deposit fees: This is the cost you pay for depositing money into an exchange or brokerage. Not all exchanges charge deposit fees and the ones that do vary it based on the payment method.
- Withdrawal fees: Nearly all platforms charge withdrawals from their wallet to a private coin wallet or a bank account. The charges also vary from one exchange to another.
- Spreads and commissions: Spread is the extra value a trading platform adds on the coin’s actual value. The trading exchange also acts as a broker and therefore charges a commission on every profit you earn from your trading activities.
3 Tips to Buy Bitcoin Cash
As we near the end of this guide, allow us to present you with some additional tips regarding Bitcoin Cash investing and trading. You are, of course, free to follow them or ignore them completely. But, with the crypto industry already being as chaotic and complex as it is, we choose to share them anyway, in the hope that they will be useful to you.
Choose the Right Time and Do Your Own Research
You will often see claims that Bitcoin Cash is a great cryptocurrency investment, and most people will agree with that. However, you shouldn't invest in BCH based on other people's recommendations. Do your own research, and make sure that you believe that it is the right call before doing it. Then, all that remains is to wait the right time to buy, meaning that you should buy when the price is low, and wait for it to surge again before selling.
Another thing worth noting is that different exchanges offer different exchange rates. So, make a comparison of different platforms before buying coins. That way, you can buy more for less, once you find the right place to do so.
Safety and Security
We cannot stress enough how important it is to make sure that you use all the necessary precautions before buying or selling coins. Ensure that you are using the safest platforms, that you have secured your crypto wallet adequately, and that you have set up all the security measures, such as Two-Factor Authentication, to ensure that no one will steal your coins from you.
What Is the Best Payment Method for Buying Bitcoin Cash
As mentioned before, there are many payment methods, and the one you will use depends on how fast you want the money deposited, and how much you are willing to pay in fees. With that in mind, you can:
Buy Bitcoin Cash with cash: Unless a friend, family member, or a trusted acquaintance is the one selling BCH for cash, it’s not advisable to purchase any cryptocurrency upfront with cash. However, there are reputable peer-to-peer platforms that facilitate the purchasing of Bitcoin Cash with cash.
Buy Bitcoin Cash with credit card: Although banks can block cryptocurrency transactions, there are quite a few exchanges and brokers out there that allow you to use credit cards as a payment option. It’s far easier to do so on broker platforms, as these are regulated by financial bodies and banks will have no issue in your investing in cryptocurrency on these platforms.
Buy Bitcoin Cash with bank transfer
Buy BCH with Bitcoin
Buy Bitcoin Cash with PayPal: PayPal and cryptocurrencies do not go hand in hand, which makes it hard to buy Bitcoin Cash with an exchange using your PayPal account. However, the BCH peer-to-peer exchange offers a way to circumvent this obstacle. You can find a seller on the platform who accepts PayPal payments. Nonetheless, you can only do this offline, which has its security issues. Besides, the sellers who accept PayPal charge premium fees because of the high risk of buybacks.
Other Ways to Buy Bitcoin Cash
Apart from the methods mentioned above, you can also get your hands on Bitcoin Cash through other means. Some methods include:
Using P2P platforms
Running Masternodes within the BCH network
Buying BCH on ATMs
Staking BCH and getting rewards
Lending BCH and earning it through interest
Frequently Asked Questions
Yes, absolutely, While it did originate from Bitcoin's blockchain, Bitcoin Cash is a completely separate cryptocurrency at this point.
Yes, BCH is a completely legal digital asset that you can buy, own, and sell anywhere in the world.
That is up to you. You can store them with hopes that they will be worth more in a few years, or you can trade them, sell them, or use them with merchants who accept BCH.
No, Bitcoin Cash can be bought in any quantity you desire, from a few cents to hundreds of coins. The only limit is the one that your exchange may have set up.
The best time would be when its price is low, although there are strategies that allow you to buy at any time and still see a decent profit in due time.