Bitcoin cash was a unicorn, Bitcoin gold to be a toad?
Bitcoin gold went live early Tuesday morning, and the resulting price action shouldn't be all that surprising.
As expected, Bitcoin gold goes live and BTC sells off:
With people piling into Bitcoin over the last several months with hopes of getting another "free lunch", akin to what happened a few months back with Bitcoin cash, the underlying BTC is now selling off to the tune of roughly 5%.
Which is surprisingly not as large of a selloff as one might expect, or should I say, not as large of a sell off as I might expect.
Though we are still very early in the process, watch what happens over the next couple days for a better indicator. Once people start getting credited with Bitcoin gold in their wallets.
What happened last time?
The last time BTC forked, Bitcoin cash was created and when it was distributed to holders of BTC, BTC did not sell off by a corresponding amount, which was rather unexpected.
Instead, the result was a "free lunch" to all BTC holders.
Roughly $7 Billion of value was created out of thin air, poof.
This time, people have been rushing into BTC hoping for history to repeat itself with Bitcoin gold.
The same distribution is set up with Bitcoin gold. IE each and every holder of BTC will be credited with an equivalent amount of Bitcoin gold.
Some Specifics:
Bitcoin gold hard fork is currently underway but most likely the newly created currency won't start showing up in wallets and exchanges for a couple days yet.
There are over 20 wallets/exchanges stating they will support Bitcoin gold for their clients.
However, Coinbase is not one of them.
Take that with a grain of salt though because they said the same thing about Bitcoin cash at first, only to reverse their decision a few days later.
Bitcoin owners on Coinbase will receive Bitcoin cash tokens in early January of 2018.
Will it work out the same this time?
That is what everyone would like to know (myself included)!
It's tough to say at this point, but I do know that from all my years in finance that when everyone is expecting markets to do one thing, they usually do something else...
Often the exact opposite.
In this example, if everyone is expecting to get Bitcoin gold AND not have the underlying BTC go down by a corresponding amount, that probably won't happen at least according to what I have observed in the past.
Yes cryptocurrency is different and yes this is not an apples to apples comparison on my part, but markets are markets and people are people. People tend to repeat the same cycles over and over gain no matter what they are trading.
In my opinion, Bitcoin cash was likely an anomaly, a unicorn, something that we won't see again.
We will know a lot more in the coming days/weeks as the distributions of Bitcoin gold get made to all the BTC holders.
Stay informed my friends.
Sources:
http://www.businessinsider.com/bitcoin-price-down-45-after-bitcoin-fork-2017-10
Image Sources:
https://www.coindesk.com/bitcoin-gold-know-blockchains-next-split/
https://www.coffscoastadvocate.com.au/news/one-ugly-visitor-giant-female-cane-toad/806213/
Follow me: @jrcornel
The big exchanges will not allow the forking bonanza to take hold, otherwise they risk the entire space becoming one big joke.
Bitcoin Cash was unique in that it had support from a sizable portion of the bitcoin user-base and businesses in the space that were in favor of big blocks, that will not be the case with any other forks.
It's just not going to happen!
Good points. I don't quite share your positive mindset about the big exchanges not allowing this to continue because I think they will just go wherever the volume is for particular coins, but I hope you are right. I am already forked out with BTC and these new "altcoins".
I do like that fact that it can be gpu mined. It prevents certain miners from taking over control of the hashing power.
Thanks for Sharing. I liked your reminder about markets doing the opposite of what is expected. It will be interested to see the outcome.
Hey jrcornel,
Thanks for the great content
Great Post...!! My opinion is that the price of the newly forked coin is a function of the People supporting it. In the case of Bitcoin Cash, it is backed by Bitcoin Jesus (Roger Ver), one of the biggest figures on the Bitcoin community. Are the bitcoingold developer/backers well known....?? If they are the price should rise....
I guess some of those who bought bitcoin ahead of the fork will now unload and go into other alt-coins. It stands to reason that BTC had a sell-off.
It also goes to show humans won't be changing anytime soon. Some will be greedy, other egotistical, power hungry, immature and or self serving. I have mine offline, and won't be putting back online just to collect another coin.
Sad thing is we probably have not seen the end of it.
Yep, as long as they keep creating free money like this, they aren't going to stop.
thnaks news
좋은 정보 감사합니다.
Thanks for the News
Thanks for the write up. I had seen the hard fork news but I want too sure what the bitcoin gold was about... I agree that it would be hard to believe it would take off like bitcoin cash tho, but I suppose time will tell.
I am already tired of these hard forks... we need a couple of these to die right away so they stop happening. Otherwise they will only increase in frequency.