Hello Steemians,
The Bitcoin Gold hype is starting to escalate and Bitcoin is appreciating against almost all altcoins. Reddit has made numerous posts now discussing the worrisome elements of Bitcoin Gold, yet the market continues to be resilient in the face of several risks. As such, we are seeing some evidence that the Bitcoin Gold hard fork is much more hyped than initially anticipated. I originally believed it would fly under the radar and act similar to a dividend while the main focus remained on 2X. I'm beginning to think otherwise given recent events.
I see a few scenarios occurring with Bitcoin Gold:
The market holds through the hard fork and Bitcoin Gold has a steady price level. This is unlikely as BTG will likely be volatile in the initial trading days (first two weeks or so).
The market holds through the hard fork and Bitcoin Gold tanks as people sell in order to buy more Bitcoin. Combined market cap should be relatively close in the long-term, but we may see it be higher in the short-term. Bitcoin's price can leg higher.
The market holds through the hard fork and everyone sells off BOTH Bitcoin Gold and Bitcoin as they realize everyone was investing for the same reason.
I'm most concerned with scenario three. I originally anticipated this scenario to occur with 2X and not Bitcoin Gold, but we are seeing more discussion of BTG now than SegWit2X in some communities. As such, scenario 3 has drastically improved in probability. It may be advisable, if you are investing in Bitcoin right now, to sell BEFORE the hard-fork, as odd as that may sound.
If you are sticking with altcoins, like I am, I expect two scenarios with these. The first scenario is where Bitcoin continues to leg higher above $5,000 to $6,000. In this event, I expect a reversal similar to what we saw in mid-August, where altcoins began to catch up with Bitcoin as it headed to new all-time highs and correlations increased.
The second scenario is a major correction in Bitcoin as a result of these hard forks and capital flows back into altcoins. They'll likely be down as well, but not nearly as much as Bitcoin. At this time, I see many altcoins as attractive and would consider placing in lowball limit orders to ideally pick some up for cheap.
Naturally, this list of scenarios is not exhaustive. The market could sell off prior to the Bitcoin Gold hard fork, or we could see Bitcoin consolidate over the next month rather than have a clear move to the upside or downside. I suspect these scenarios are less likely, but I am watching closely and preparing in the event they occur. As always, it is best to plan ahead so you are less exposed to emotional decisions.
What are your thoughts on the markets? This is my first post on Steemit and I am looking forward to becoming more active on the platform long-term, and ideally sharing some of my better content with you when I write an article along with the video. For now, this is my first entry onto the platform mostly so I have some experience posting and can get used to how it works here. I appreciate all follows and comments and look forward to engaging with you. Thank you.
The reward of this comment goes 100 % to the author cryptovestor. This is done by setting the beneficiaries of this comment to 100 %.
I can't really see scenario 3 occurring, been in this game for a couple years now. If bitcoin moved down to 2k or 1k, Im buying dozens more!
I agree with you on the front of buying Bitcoin if it crashed to those levels. But on the topic of scenario 3, I can tell you when everyone expects something to happen, the exact opposite usually does. Perfect example of this was the election of Donald Trump and its impact on markets. Everyone expected the stock market to get slammed. Dow Futures were down 5% at one point during election night. VIX spiked up to around 50 at one point if I recall. Following morning S&P 500 closed the day up (forget exact amount, but it was a healthy increase). There are plenty of examples throughout history. With everyone expecting it to be "free money," it is becoming a larger and larger possibility.
That's very true. I guess, do you think that the number of users that participate as in not only buying/selling but marketing/advertising and number of developers working on improving in each cryptocurrency community can impact price of said cryptocurrency? What I'm getting at here is, steemit is in competition pretty much against reddit, where as this crypto rewards you with value in steem for upvotes and quality content, then can send to an exchange/sell for bitcoin/then sell to USD reddit doesn't, yet steemit only has 350,000 total users worldwide, reddit has 10 millions. Btw, I'm the same guy from that youtube comment on being your first follower here! haha
Of course they impact the price. Even ICOs, which you would think are entirely unrelated to Bitcoin, have driven its value up in the past few months in my opinion. Steemit has a long way to go before adoption by masses because frankly, it's not like a normal platform that most people are used to. In addition, a lot of marketing for other social media platforms comes from word of mouth, which Steemit really isn't at that point yet (except in crypto circles). That said, it certainly looks a lot and interacts better than Reddit does.
Thanks @cryptovestor -- great info! I'm now following you and upvoted. Hope you will follow me for original content and news about Blockchain, Bitcoin, Cryptocurrency and ICOs. Cheers! @thoughtchain
Great piece on altcoins. Here's a head's up on one you might want to take a closer look at:
Disclaimer: I am just a bot trying to be helpful.