As the crucial dates gets near, the markets reacts to a possible one or many bitcoin forks. This was expected.
Some Exchanges are adding to the turmoil and setting the market on fire by sending emails warning of none support for certain forks, and shutting down bitcoin withdrawals/deposits during the time of uncertainty.
Success of BIP91 and the miners signaling for Segwit almost unanimously, did little to stop interested parties from going forward with plans to fork bitcoin regardless. Whatever motives these parties have is not important now, like I said before, each party wants his own toy branch to play with.
What will happen to Altcoins?
Obviously having your bitcoins in your wallet with your own private key will give you access to a strong bitcoin and a number of new forks based on bitcoin in a matter of a month. This will most definitely be much better than having your wealth in any altcoin. The altcoin market will suffer from lack of support as more people move out of exchanges into private wallets and hardware wallets. The Exchanges warning customers of none support for all resulting forks is adding oil to the fire, in the next two days more and more bitcoins will leave exchanges to a safer ground.
The migration from alts started today, there are opportunities to make money from falling altcoin prices, but lets look at a scenario where bitcoin actually forks into more than one:
- You have X bitcoins in your private wallet
- In a month time you will have either a much stronger X Bitcoins or X bitcoins with equal amounts in the bitcoin branches that will pop up
- If you hold your X Bitcoins then the value will include those Bitcoins plus the value of all resulting branches. If you invest your X bitcoins in an alt coin, that altcoin must hold or exceed that value.
- in the short term I do not see any altcoin able to do so, with the dwindling support on exchanges. In fact we will see new markets that will take away attention from current altcoins to newly created branches of bitcoin.
My recommendation:
- Hold on to your bitcoins in your own private wallet, enjoy a strong bitcoin, and/or the free coins from bitcoin branches.
- Invest in altcoins that you think will increase in price by a factor of four in the short term. I do not think this is an option unless you know better.
- You might do well holding some altcoins, but I am not convinced, some altcoins will come back strong after all this passes.