Bitcoin Cash (BCH) stands as one of the most prominent Bitcoin hard forks. At its peak, BCH reached a valuation equivalent to a quarter of Bitcoin's price. Today, however, its value has diminished to roughly one-fortieth of Bitcoin's market cap.
Behind these dramatic price fluctuations lies a compelling narrative—a saga born from ideological clashes, culminating in a costly battle that left multiple parties facing significant losses. Yet, it is premature to declare BCH a failure. It remains a top-five cryptocurrency by market capitalization, backed by a dedicated community of supporters. Among these advocates, one individual stands out: Jiang Zhuorer.
Jiang publicly disclosed his investment portfolio as 4321: 40% in BCH, 30% in BTC, 20% in ETH, and 10% in innovative altcoins like EOS. He argues that BTC's scalability issues will resurface during the next bull market, mirroring previous cycles. This congestion, he believes, will drive attention and capital toward BCH, resulting in a significantly higher BCH/BTC trading ratio when market conditions improve.
Who Is Jiang Zhuorer?
Why is Jiang's perspective particularly noteworthy? Here’s a brief overview:
- Investment Expertise: Jiang entered the cryptocurrency space around the same time as Nan Gongyuan. Starting with just two graphics cards for mining, he gradually built a mining pool from scratch and multiplied his assets many times over.
- Educational Influence: He authored the comprehensive article "What Is Bitcoin?" on Zhihu, which has become one of the most-read introductory guides to Bitcoin, essential reading for newcomers to the crypto world.
- Market Prediction Skills: In 2016, using his own forecasting model, Jiang accurately predicted the 2017 bull market, penning the article "4,000 RMB Is Just the Beginning of the Bitcoin Bull Market." He also managed to exit the market at peak prices before the 2018 downturn and famously predicted the previous cycle's market bottom at $3,000.
- Credibility and Integrity: Unlike many crypto influencers, Jiang has never endorsed any ICO projects or teams. He maintains a low public profile but remains active online, sharing insightful and thoughtful commentary.
Despite his track record, Jiang consistently emphasizes that short-term price movements are unpredictable.
The History of Bitcoin Cash
After Satoshi Nakamoto published the Bitcoin whitepaper, BTC gradually attracted a growing following due to its technological innovation. Among its early adopters was Jihan Wu, co-founder of Bitmain.
Bitcoin's design limits it to about seven transactions per second, with a block reward halving every four years. The Bitcoin Core development team controls the codebase and has resisted increasing the block size, as originally envisioned in Nakamoto's whitepaper. This stance sparked frustration among many who feared that network congestion would lead to exorbitant transaction fees, hindering Bitcoin's mass adoption.
While most critics could only voice complaints, Jihan Wu had the resources to act. He not only possessed technical knowledge—having translated the Bitcoin whitepaper into Chinese—but also substantial financial capital.
On August 1, 2017, Wu initiated a hard fork of Bitcoin, resulting in Bitcoin Cash. All Bitcoin holders received an equivalent amount of BCH. With Bitmain manufacturing the majority of Bitcoin mining hardware at the time, Wu envisioned a promising future for BCH: by controlling a significant portion of the supply and leveraging mining hardware sales, he aimed to boost BCH's value and eventually overtake Bitcoin.
Wu put this plan into action, investing nearly all his bull market profits into BCH. The price of BCH soared from its initial value of $400 at the fork to an astonishing $9,500.
However, the subsequent bear market hit BCH harder than BTC. Bitmain's flagship miner, the S9, which had once sold out at $2,700 per unit, saw its price plummet to below $300. Bitmain lost billions of dollars, retaining only a fraction of its previous wealth.
In 2018, Craig Wright (also known as "Faketoshi")—previously an ally of BCH—disagreed with proposed upgrades to the network and initiated a hash war between BCH and his own project, Bitcoin SV (BSV). This conflict消耗d immense resources and further damaged BCH. Meanwhile, BSV gained a foothold in the blockchain world through relentless promotion.
The Current State of BCH
Where there are people, there are conflicts. The cryptocurrency world advocates decentralization and "code is law," but code is written by humans. Ideological disputes are inevitable, much like societal evolution—outcomes are uncertain.
Setting aside these complex backgrounds, let's examine BCH's current status.
At present, BCH is in a pronounced downturn. Since its inception, its investment return rate sits at -59.22%, despite maintaining a daily trading volume of over 6 billion RMB. Thanks to its block size design, BCH offers faster transaction speeds and lower fees compared to BTC, providing a superior user experience for actual use. The primary issue is that the market universally recognizes the exchange-listed token coded BTC as Bitcoin, with few considering BCH the true Bitcoin.
Nevertheless, merchant adoption of BCH is gradually increasing globally, particularly in Australia and Japan. Slovenia leads the world in BCH acceptance, with 432 retailers supporting the cryptocurrency. Though small with just over 2 million residents, Slovenia is highly developed and boasts a population with substantial wealth and life satisfaction. In this nation, residents can purchase up to 80% of daily necessities using digital currencies—a scenario aligning with the ideal of cryptocurrencies becoming genuine mediums of exchange.
In Slovenia, BCH enjoys the highest usage rate among cryptocurrencies, followed by ETH. Major retail stores have integrated digital currency payments at checkout counters. Roger Ver, Executive Chairman of Bitcoin.com, frequently shares his experiences using BCH for purchases on social media, posting videos of transactions.
Overall, among merchants accepting Bitcoin payments, approximately 90% also support BCH. However, challenges remain. According to Chainalysis, about 56% of all BCH is held in 67 wallets not associated with exchanges—indicating a high degree of concentration that raises concerns about decentralization.
It's important to note that current price action does not directly correlate with real-world usage. While adoption provides one metric for evaluation, price is influenced by a variety of factors.
The Future Potential of BCH
Since the beginning of the year, as the overall market declined, usage of BCH also dropped significantly—partly because the BTC network became less congested.
Proponents of BCH believe that when the next bull market arrives, BTC's scalability problems will become unavoidable. If transferring a small amount requires fees exceeding $100 and takes several days to confirm, who would continue using BTC? At that point, acceptance and recognition of BCH could surge substantially.
There is reason to believe that Bitmain, which holds a large amount of BCH, will take action to capitalize on this situation. Although Bitmain's plans for a Hong Kong IPO have essentially been abandoned, the company has initiated an IPO process in the United States, indicating shifting market dynamics.
Moreover, Bitmain's new mining hardware is set to launch in December, which will further increase the network's total hash rate. We must not forget Bitmain's ability to influence markets through strategic buying.
Many may not fully understand the logic behind Jiang Zhuorer's statement about "firing all bullets" in October—a point he himself did not elaborate on. However, our analysis may have uncovered a part of this strategic thinking.
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Frequently Asked Questions
What is Bitcoin Cash (BCH)?
Bitcoin Cash is a cryptocurrency that originated from a hard fork of Bitcoin in 2017. It was created to address Bitcoin's scalability issues by increasing the block size, allowing for more transactions per block and lower fees.
How does BCH differ from BTC?
The primary difference lies in the block size; BCH has a larger block size than BTC, which enables faster transaction times and reduced fees. However, BTC has a larger market capitalization and broader recognition as the original cryptocurrency.
Why do some investors support BCH?
Proponents believe that BCH better fulfills Satoshi Nakamoto's original vision of a peer-to electronic cash system due to its scalability and lower transaction costs. They anticipate that increased adoption will drive future value.
What are the risks associated with investing in BCH?
Risks include high market volatility, regulatory uncertainties, and competition from other cryptocurrencies. Additionally, a significant portion of BCH supply is concentrated in a small number of wallets, which could impact price stability.
Can BCH overtake Bitcoin in the future?
While theoretically possible, it remains highly speculative. BCH would need to achieve substantially greater adoption and market trust to rival BTC's dominant position. Market dynamics and technological developments will play crucial roles.
Where can I learn more about cryptocurrency investing?
For those interested in deepening their understanding, many educational resources and platforms provide insights into market trends, trading strategies, and technological advancements in the blockchain space. 👉 Access real-time market tools