The State Of The Market
As I type this, Bitcoin is creeping into the mid $4,800- mark. That makes it's all time high of $5,000 just a stone's throw away.
It seems that Bitcoins pump was fueled by money flowing out of altcoins.
What does that mean?
If you're holding any alts take a look at your portfolio. Yesterday and the day before the altcoin space was seeing red while Bitcoin was rallying significantly. Today looks like more of the same, however we are seeing some of the alts recover (thankfully).
What Is Going On?
I'm not sure if everyone has heard but there is another fork coming for bitcoin, (two actually) but one is resulting in another currency. For whatever amount of bitcoin that you hold, you will receive bitcoin gold. Some of you may remember the fork causing bitcoin cash. It's going to be exactly the same, (presumably). So everyone is rushing now to jump into bitcoin so that when the fork happens they are essentially getting free money. And by essentially, I mean they literally are. Only thing to be weary of is that bitcoin gold COULD tank. In which case, holding it long term may not be in everyone's best interest.
So, Wait Why Does That Effect My Alts?
Well think about it, the money flowing into bitcoin has to come from somewhere correct? Most people at this point are selling their alts to buy into bitcoin. Obviously the more bitcoin you hold, the more bitcoin gold you will receive. I assume they will sell their bitcoin gold and head back to their alts after the fork. Unfortunately this all seems to happen at once and bittrex and other alt platforms looked like a murder scene.
Nothing is set in stone obviously and there's no guarantee that bitcoin gold will be able to hold it's own. However approx. $7 Billion was materialized out of thin air to support bitcoincash, so this gives people the incentive to hold bitcoin during the fork.
Image Sources:
https://www.bitfinex.com
https://crushthestreet.com/articles/digital-currencies/bitcoin-gold-dont-adversaries-strengthen-portfolio
http://reason.com/blog/2014/02/28/bitcoin-forever-why-the-alt-currency-or