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.