LUCKNOW (CoinChapter.com) — Bitcoin Cash (BCH) has experienced a notable increase recently, spiking nearly 84% since March 20 to reach a daily high near $640 on March 29. The growth spurt in BCH prices captured the attention of investors and traders alike.
Bitcoin Cash’s price rally pared some of its gains on March 29 after reaching its highest level since Nov. 2021.
However, a combination of factors, including the cryptocurrency’s upcoming halving event and the announcement of a significant network upgrade set to deploy in May 2024, might help BCH tok continue rallying.
The Impact of Halving
The halving event is a mechanism embedded in the DNA of Bitcoin Cash. It reduces the reward for mining a block by half, similar to the Bitcoin halving. The event occurs every four years and aims to control the supply of BCH. As such, the halving event introduces a deflationary aspect to the cryptocurrency.
As the reward for miners decreases, the new supply of BCH tightens, potentially leading to an increase in price if demand remains constant or grows.
Historically, halving events have been bullish for the tokens involved as they tend to increase speculation and interest in the affected cryptocurrency.
The anticipation of reduced new supply often leads to bullish sentiments among investors, driving up the price ahead of the event. For Bitcoin Cash, the upcoming halving is no exception, contributing significantly to the current price rally.
Anticipation of the May 2024 Network Upgrade
Another crucial factor influencing the price of BCH is the upcoming network upgrade in May 2024. This upgrade includes the implementation of an adaptive blocksize limit algorithm, which would enhance the project’s ability to scale and adapt to varying levels of transaction demand.
The new algorithm adjusts the block size limit based on the exponentially weighted moving average size of previous blocks, effectively making the network more responsive and efficient.
Moreover, the upcoming update addresses concerns like scalability and network congestion, which have plagued the Bitcoin Cash community for some time now.
By introducing an adaptive and more responsive approach to block size adjustments, Bitcoin Cash aims to enhance its utility and appeal as a transactional currency.
Moreover, the upgrade claims it would reduce the social and technical complexities accompanying manually adjusting block size limits, streamlining network governance, and reducing vulnerability to social attacks.
The imminent halving event and the anticipation of the May 2024 network upgrade likely shaped the Bitcoin Cash token’s recent bull run.
