Four days ahead of the halving of the Bitcoin Cash (BCH) network, the cryptocurrency has recorded significant gains, and open interest in the asset’s derivatives products has more than tripled, placing it on the radar of crypto community members.
Data from CoinMarketCap shows BCH has rallied over 15% in 24 hours and 33% in the past week. Bitcoin Cash open interest, per data on CoinGlass, has soared from $213 million recorded last week to $706 million presently, indicating growing bullish sentiment among traders prior to the halving event.
Bitcoin Cash Halving in Four Days
Bitcoin Cash was created in 2017 as the first hard-forked version of Bitcoin. The network is expected to deliver cost-effective transactions following the enlargement of its blocks to incorporate a larger number.
The upcoming halving is Bitcoin Cash’s second, with the first in 2020, and there is a lot of speculation about the event’s effect on its network and token.
Halving is a mechanism built into the blockchain code that slashes the reward for mining blocks by 50%. Like Bitcoin, Bitcoin Cash’s halving occurs every four years or after 210,000 blocks, lowering the rate at which BCH is produced and the amount of new supply. With a capped total supply of 21 million, BCH combats inflation through the halving.
At the time of writing, the Bitcoin Cash halving is four days and 941 blocks away. By the time the event is over on April 4, block rewards for the network will be reduced from 6.25 BCH to 3.125 BCH. Notably, Bitcoin’s halving is 23 days away.
Rising Interest in BCH
The surge in Bitcoin Cash open interest indicates an uptick in leveraged bets and expectations of high price volatility before and after the halving. Analysts have predicted that the asset could rally from its current trading level of $568 to $600 by April 1 and $2,000 in the coming months as more capital flows into the ecosystem.
Moreover, the largest American crypto exchange, Coinbase, is looking to launch monthly cash-settled and margin futures contracts for BCH on April 1, providing an avenue for inflows into the network.
Meanwhile, the upcoming halving has doubled Bitcoin Cash’s hashrate in the past three months, making mining operations for the asset 0.2% to 0.4% more profitable than Bitcoin mining.
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