What is BCH Bank Run?
The initial discussion on the BCH Podcast which spawned the idea of BCH Bank Run. Full episode here.
BCH Bank Run is a twice monthly social event (1st & 15th of every calendar month), where the BCH community buys & withdraws BCH from cryptocurrency exchanges en-masse in a co-ordinated burst. It can be thought of as a form of decentralised social financial activism, similar to the social-media fuelled /r/wallstreetbets buybacks of GME (Gamestop) stock. It serves several functions, including reinforcing a culture of self-custody, pushing back on financial manipulation of BCH markets & creating attention & interest in the Bitcoin Cash project.
As with every other aspect of the Bitcoin Cash mission to change the global reserve currency, it starts off small but is intended to scale exponentially as momentum builds. Somewhere between a fortnightly market withdrawal of 1 BCH & 1 000 000 BCH is a tipping point at which markets HAVE to react (see Impact below).
Background
A central principle of Bitcoin is the need to remove middlemen from transactions - both for economic efficiency & individual sovereignty - as specified in the Bitcoin whitepaper. This has been best summarised in the phrase "Not Your Keys, Not Your Coins".
This ethos (once very strong with phrases like "stack sats" & "HODL") is fading in the Bitcoin Core community since the Hijacking and brand has fallen apart - but the BCH community will not relinquish it.
At a macro scale, the BCH community is converting the entire planet to using BCH non-custodially for all their financial transactions. However, the challenge is that governments can print a literally infinite amount of fake fiat currency to fight back. This means governments have limitless funding until they print so much that hyperinflation forces their desperate population to seek refuge in limited-supply, non-custodial BCH for their financial transactions.
This endless money printing is undoubtedly used to manipulate & suppress the price of Bitcoin Cash, the only question is how much & to what extent.
Cryptocurrency Exchanges
Despite their branding as "cryptocurrency exchanges", such companies operate in reality very similar to the fiat banking institutions that BCH is slowly replacing. They do not hold all the user assets they claim to, instead either lending them out to earn interest or selling them at other venues to speculate in the markets or even just plain paying them to their employees while reassuring users they have access to (fake) BCH assets. This is fraud, but it's very widespread.
There is only a limited supply of Bitcoin Cash in the world, and there is no way to make fake on-chain BCH. BCH Bank Run is designed to leverage this fact, one of the few aspects of the financial markets that can be relied upon & effectively impacted by end-users.
Every two weeks, BCH users withdraw coins from exchanges into self-custody. As the BCH is withdrawn, it shrinks the individual or global pool of reserves of real BCH held by exchanges. There are only three possible responses:
- Open a BCH short: The exchange can borrow BCH to make up the difference that they're lacking & hope to pay it back later (once the BCH price drops). This is almost certainly what already happens - but as the volume of a Bank Run ramps up the cost increases as shorters demand higher premiums to do so. Eventually, exchanges simply cannot afford the interest cost to borrow more BCH (especially if redemptions are frequently demanded on-chain) & must resort to options #2 & #3. They can also try naked shorting, which is giving out BCH which they didn't even borrow but rather just stole from other depositors. If the bank run reaches significant size, eventually they run out of BCH entirely & must naked short by selling some OTHER assets on hand (e.g. BTC, ETH, fiat reserves) in order to purchase BCH & fill withdrawals - which is a win for the BCH community. Naked shorting of alternative assets is unfortunate, but that's the problem of those other communities to address with their own bank runs.
- Withdrawals shutter: If unable to meet their supposed user assets with real on-chain BCH, exchanges can halt BCH withdrawals &/or close BCH trading pairs. In an extreme case, the exchange goes bankrupt & simply collapses from being unable to meet the demands of depositors. However, even in the mild case, closing BCH withdrawals in response to BCH Bank Run is an implicit admission to fraud which can spark a user panic in their other assets. If BCH is permanently delisted, the BCH community has successfully eliminated one point of fraud from the global BCH trading market. There's no malice or hope that BCH gets delisted, it's better that it doesn't, but if it does get delisted by fraudulent market manipulators unwilling to operate correctly according to their reserves that is still a win (users can find a more legitimate source to acquire BCH from).
- Price increase: As scarcity of BCH to supply to users decreases, price adjusts upwards. BCH users celebrate as their purchasing power increases & they become more passionate about participating in future bank runs. Non-BCH users see the rising BCH price & become curious - beginning their journey to peer-to-peer cash (& hopefully joining into future bank runs themselves).
Note that option #1 is limited by the availability of non-custodial BCH & the exchanges' willingness to pay for short selling premiums (which eventually they cannot stomach), while #2 & #3 are both huge marketing & morale wins for the BCH community. Shutting down fraudulent exchanges by community co-ordination and/or a rising BCH price are both very reliable ways to increase excitement within the BCH community & attract external interest in Bitcoin Cash. In this way, successful Bank Runs can quickly escalate as hype around BCH draws in more bank run participants which creates more impact and thus more hype. Slowly, then suddenly.
Motivation
BCH Bank run serves several different purposes:
- Challenging market manipulation: ~. Given enough ~.
- Marketing: A sudden sharp rise in BCH price is an attention-attracting event to other cryptocurrency speculators or market participants. Repeated rises become a source of curiosity as to why BCH is behaving this way & prompts further investigation. Discovering the BCH community is coordinating this in a decentralised way to reinforce its culture of self-custody is even more impressive & fascinating.
- Fun: The regular occurrence of BCH Bank Runs is a fun thing for the community to celebrate & participate in as a culture.
How to participate
- Stack BCH: On the 1st & 15th of each month, purchase some BCH from an exchange & withdraw it into a self-custodial wallet.
- Promote the bank run: Make noise on social media, chat groups or among your friends & family to get people interested in the Bank Run & Bitcoin Cash. If you are a BCH related business, consider integrating the Bank Run into your promotional marketing or information.
If you do not use cryptocurrency exchanges & already live on BCH, congratulations! You can still help out the effort by acquiring BCH via selling your goods & services on that day (or doing extra promotion or timing payment of your invoices to customers for that day), anything that increases your non-custodially held supply of BCH contributes equally. The invisible hand of the market will spread that pressure on the limited supply of BCH to exchanges.
Many cryptocurrency users already DCA (dollar cost average) their purchases according to their paycheck income cycle or regularly buy BCH. In this case, simply changing that regular purchase & withdraw to 1st &/or 15th of each calendar month is a simple adjustment to be part of the effort.
FAQ
Q: Why is this so impactful?
A: Price is set at the margins, and volatility increases when liquidity is low. Thus a sudden surge of BCH purchasing orders can make a significant impact, particularly if it forces BCH shorters to scramble to acquire real coins to honour their withdrawals.
Q: How will we know if this is working?
A: First, by monitoring social media to see if viral traction or reactions are picking up. Second by watching the market to see if BCH price responds to the bank runs. And third by watching exchanges, if they are forced to close BCH withdrawals due to lack of coins (likely covered by some other excuse) or acknowledge these bank runs in any way then it means the pressure is starting to seriously hit home.
History & Results
The first BCH Bank Run was held on 1st March 2025 & has been continued twice per month since.
Direct impact is very hard to provably demonstrate - but there are indicators to watch for. Each run gives additional data & context.
- Price impact: The BCH withdrawals should increase the price by increasing BCH demand / reducing exchange order book supply. In the short term, the impact of the bank run may be overshadowed by movements in the great cryptocurrency market, or even just other factors influencing the BCH price specifically such as BLISS or the unobservable flow of high net worth individual purchases. It can also be minimised (in the short run) by exchanges taking out increasing naked short positions. Therefore it's hard to definitvely confirm any given price movement as influenced by an individual bank run. But a consistent & increasing BCH outperformance against the market (on the 1st & 15th dates of the bank run, or in general) is an encouraging sign. Large price spikes on the 1st & 15th is also a good sign.
- Exchange distress: Exchanges having issues with withdrawals or putting BCH support into "maintenance" can always be explained/excused as routine or from small programming bugs or similar. However if a pattern of these incidents becomes increasingly apparent on bank run days that will be very suspicious. It's unlikely the exchanges will admit to short-selling BCH, misusing customer funds or sharing assets behind the scenes, so the only reliable indicator is a change in their behaviour.
| Number | Date | Start price ($USD) | End price ($USD) | Notes | Tweets |
|---|---|---|---|---|---|
| 1 | 1/3/2025 | 315.86 | 311.22 | ... | Source |
| 2 | 15/3/2025 | 330.35 | 342.82 | ... | Source |
| 3 | 1/4/2025 | 303.32 | 308.47 | Poloniex disables their BCH withdrawals for 1 hour for maintenance the day before the bank run. | Source |
| 4 | 15/4/2025 | ... | ... | Kraken is unable to deliver BCH withdrawals to BCH community figure molecular, which Kraken falsely blame on the BCH blockchain (which was running perfectly). | Source |
In future, it would be nice to make an automated website that requests the price history for bank run days, as well as the day before and after - with checks on the daily high/low to see if volatility increase. This could be compared against the broader market & analysed to see if BCH consistently outperforms the market on those bank run days.