What happens to its price, if Bitcoin forks again on October 25?
Since a couple of days rumor has it, that there will be another hard fork of Bitcoin at the end of October. So with Bitcoin Gold, there could be another cryptocurrency bearing the Bitcoin name.
This of course begs the question, of what would happen to the price of bitcoin and alt-coins, if the next hard fork becomes reality.
I see a couple of scenarios that are more or less likely to occur. Here they are:
Scenario 1: the value of Bitcoin shoots up, while alt-coins dive
Many newbies (including myself) have learned one thing with the Bitcoin Cash-fork: a hard fork means, that you're going to have the same amount of coins on the new blockchain, as you had on the "original" blockchain.
So for example having 5 Bitcoin before the Bitcoin Cash-fork, would have given you 5 coins of Bitcoin Cash for free.
Now the same thing would happen if there was another hard fork.
Smart traders will therefore clear their alt-coin positions before the next fork, so that they'll have as many Bitcoins as possible in their wallet.
This will have two consequences:
- The price of Bitcoin rises
- The price of alt-coins drop
Probability of 70%
Scenario 2: the price of Bitcoin dives
As with the Bitcoin Cash-fork, there will be a lot of FUD concerning Bitcoin's future.
This in turn will cause traders to go back into fiat and wait for the storm to calm down.
Accordingly, the price of Bitcoin will take a dive as it did in June-July (from $3'000 to $1'850)
Probability of 50%
Scenario 3: not much is going to happen
As some think, the importance of the Bitcoin Gold-project appears up for debate.
Given that Bitcoin Cash produced an ultimately smaller Bitcoin network, not to mention a cryptocurrency that's worth about 12 percent as much as Bitcoin, most seem to view the plan as a mere distraction.
For one, bitcoin gold looks like it could be even smaller that bitcoin cash, at least in that not as many miners seem to support it.
As a consequence, most investors will think that it was not worth the risk to settle from alt-coins to Bitcoin, just to get some free Bitcoin Gold, whose value might be considerably lower and that of Bitcoin Cash.
So in this scenario, we don't expect to see big trading-volumes and price-fluctuations
Probability of 40%
Scenario 4: Bitcoin goes slightly up, while alt-coins dive
This scenario is a combination of scenario 1 and 2. Personally I think this is the most probable scenario.
I think that there will certainly be some traders that are trying to make gains from the new free coins and therefore causing Bitcoin's price to rise.
On the other hand there will also be more risk averse traders selling their BTC and alt-coins for fiat money, causing the price of Bitcoin and alt-coins to drop.
When it comes to the price of Bitcoin, the behavior of risk seeking and risk averse traders is neutralizing each other and causing the price to be more or less the same.
When it comes to the price of alt-coins however, both risk seeking and risk adverse traders are selling their alt-coins, which causes the price to dive.
Probability of 80%
Nice post Pascal! I think it will raise before the hard fork because then you have both coins and after the hard fork the bitcoin will dip and then go up again.
But Pascal you have to explain me one thing, how can the whole amount of probability be over 100%? ;)
You got a resteem from me!
Thank you very much Mr. Goodmindset! Oh you're right - I was not very clear about this :D The probabilities of the scenarios are meant to be considered for themselves. But after all: how do you want to measure them? Percentages actually don't make much sense. It's just another way to say that I consider the last scenario to be the most likely ;)
Yeah that's true and you can't measure them! I mean I knew what you wanted to say with the percentages so everything is fine. :)
This is the kind of article I like when it comes to Bit/alt coin topics.
Not only do you write about current issues and information people should know if they invest or otherwise support the subject matter, but also spell out what it means surrounding the angle about which you are writing and offer possibilities to consider.
This offers readers ideas they may not have considered and increases their ability to come to a more educated or informed conclusion and decision. Authors like you offer a good contribution to the new and the practicing, and you do it in a casual and readable style.
Thank you,
DJ
Thank you for your comment. It's these kind of comments that keep you going :)
I plan on a temporary dump of my Ethereum, likely a week in advance to make sure I don't suffer a lower selloff return that I think will be seen two three days in advance of the fork as most people will likely want to hold alt coins as long as possible before the fork. Then Ill give the BCG a week and likely sell off and go back to my old positions with Ethereum and keep all the gains invested in BTC.
Just my two STEEMS Worth.
At the end of the day, BTC will keep marching ahead. In the short run, yes it could pull back, even severely. However, I think the forks just serve as a distraction. Wall Street money is entering the picture and these people know the name Bitcoin. They arent going to research the difference between Gold cash or the original.