People are under the impression that the lock-in of Segwit and then the following 2MB block-size increase is a fundamental positive for bitcoin. To this point, I agree. However, is this a new event or something that was already priced-in to the price of bitcoin?
Let me provide a easy example for people to wrap their heads around. Imagine if a company said they were going to earn 100% more profit come next year. Then at the end of that year, they announce the final results where they did in fact earn 100% more profit. Most people would think it should go up at the end of that year. But really, in the stock market world, most of the time it will go up just based on the initial announcement so long as the market believes what the company is saying. Meaning, by the time the event has happened, it has already been fully priced into the stock.
The only reason this does not work so well in crypto is that crypto people are actually less sophisticated and not on top of their game as well as the stock world is. You can actually find situations where the market ignores great announcements, and then begins correctly pricing an event afterward. NavCoin has been a great example of this in the past. With a high-profile coin like Bitcoin, though, I do not expect it to be overlooked since this is the most visible coin in the whole market. It actually receives the traditional pricing in advance of events treatment.
According to people who understand bitcoin's tech, and how the market interpreted everything, bitcoin has failed to scale for the past two years. People who really understand Segwit 2x, also understand this will fail to achieve sufficient transaction volume for bitcoin. At best, trusted 3rd parties can open up payment channels such as Coinbase <-> Bittrex, to alleviate some pressure on blockchain transaction volume. 2MB blocks will double the transaction volume, moving us from a measly 4 TPS to 8 TPS. Segwit is expected to be some marginal gain, let's say 20%. After Segwit2X is fully realized, this could bring us to a whopping 10 transactions per second!!!
Investors and traders made their decision about the bitcoin scaling debate some time ago, apart from bitcoin. Over a year ago, we had to decide how this should affect the price of the coin. When Mike Hearn made his announcement that mining was centralized and the scaling debate has failed, ect. ect.
https://blog.plan99.net/the-resolution-of-the-bitcoin-experiment-dabb30201f7
Bitcoin tanked on Mike's announcement. Then it quickly recovered. The market decided that in the end, the scaling that should have happened is not going to limit the price of bitcoin. Market traders and investors including myself began ignoring this factor because it was irrelevant to the price movement higher.
By the time that the Segwit2X had been anounced and fully priced into the market by the end of May 2017, bitcoin's price was under $2400 USD. If you look up a bitcoin chart for the end of May, it will confirm this.
http://www.coindesk.com/bitcoins-segwit2x-scaling-proposal-startups-stand/
Old news, is old news. When the declines in bitcoin began happening along with the rest of the market, an explanation was needed. Segwit2x, the old news, became the explanation. This happened to the point most everyone believes it now, making it an important event due to widespread belief.
"Sell On Good News, buy on bad news"
Then if Segwit2X and the scaling debate is solved, there is a widespread saying and understanding, "Sell on good news", "Buy on bad news". While not 100% true, it is about 90% true. Certain bad news will kill something, but most bad news is just buying opportunities. With bitcoin, I was watching one Youtuber, who was empirically demonstrating this as true, showing articles of bad news events as buying opportunities, and then taking the good news articles and demonstrating those areas of the chart were tops in price.
I do think a pop could happen when the network does not explode come August 1st. I am not sure that pop will be a higher price than we are seeing today, nor be new highs for bitcoin. After that pop, then what?
Then we become realistic, a painful, 2 year long upgrade has improved transaction volume about 20%. If investors stopped caring about the scaling debate over a year ago in terms of it affecting the price of bitcoin, will investors care about an improvement that does not solve the scaling debate?
How is a 20% improvement to the transaction volume of bitcoin, a fundemental factor which is going to drive bitcoin up to 4k?
It is neat, but if the market were pricing bitcoin based on its technology and improvements, I think we would have to say the price after the Mike Hearn crash in early 2016 is what bitcoin deserves for a price. Rather, we just ignored the technological fundamentals of bitcoin and are focused on things like "store of value" and "most popular use". Some scaling does help protect that a little bit long-term, but marginal improvements do not protect bitcoin from competition from other coins.
Just to summarize my thoughts:
Market largely stopped caring about bitcoin scaling, and we decided not to price bitcoin based on this factor, should the market price bitcoin based on its technological superiority in scaling, we would give it an F, and bitcoin's price would have to drop significantly. Rather the market does not view bitcoin in this manner, we stopped a long, long time ago.
Segwit2X is old news. The pricing of bitcoin upon realizing this news event, was about $2,400.
"Sell on good news, buy on bad news", come August 1st, either the network implodes and bitcoin crashes (buying opportunity possibly), or the network is fine which is a good reason to sell!
Obviously, if you are long-term for bitcoin, then holding is fine. I still believe it will break 3k when the market is done working out a consolidation. I am just deflating the argument that, "Nothing can hold bitcoin back now that Segwit is locked-in!" Meaning, bitcoin should have never rallied to 3k in the first place, because scaling is a major determining factor of price. If we can ignore it on the way up, certainly we can ignore a 20% improvement that does not solve any of the core issues of scaling.