In 8 days and 21 hours, Bitcoin Gold fork will happen in block 491407. It means that a new Bitcoin will appear in the market, named BitcoinGold (BTG). If Bitcoin is going to split, why is Bitcoin price being traded at $5750? Why have we seen Bitcoin touching new price records just some days ago?
What is Bitcoin Gold?
Before we give an answer to these question, we need to know what Bitcoin Gold is and how experts expect that it will affect the market. Bitcoin Gold is a new cryptocurrency that will share the blockchain information that Bitcoin had until block 491407. Once we arrive at this block, then the Bitcoin blockchain will split into two, the one that Bitcoin will follow, and the other path that Bitcoin Gold will take.
But which is Bitcoin Gold purpose? As it is explained on Bitcoin Gold official webpage, the idea is to make Bitcoin mining decentralized again. Nowadays, mining Bitcoins have become exclusive for some few companies, and small miners struggle to obtain some profits with the Equihash algorithm. With Bitcoin Gold, this changes. It provides to more people an opportunity to participate in the mining process.
If this is a better way of conceiving Bitcoin, then, Bitcoin price should drop and let the new currency take the lead on the market. Well, not exactly. Investing in cryptocurrencies is quite different than any other assets that we know on the financial markets.
What happened before?
When Bitcoin Cash (BCH) split, the owners of Bitcoin could claim an equal amount of Bitcoin Cash if they knew their private key. This situation allowed investors to multiply their money without doing anything.
Fourteen days after the fork, Bitcoin Cash arrived at $1000 dollars and since then BCH follows a down trend. At present, Bitcoin Cash is being traded at $315 dollars. At the same time, Bitcoin price grew up almost exponentially. At the moment of the fork, Bitcoin was traded around $2750 dollars. One month after it, Bitcoin arrived at $5000 dollars. But the long term trend, allowed Bitcoin to cross the $5000 dollars’ resistance level and arrived at $5860.
And now, do we see something similar?
Since some weeks, Bitcoin price is on a bullish market that will last, stable at least, until the Bitcoin Gold fork. What is happening now is that, as it happened before with Bitcoin Cash, the owners of Bitcoin will experience that they will have the same amount of Bitcoin that they possess now but in Bitcoin Gold. This situation created a movement of capital from other cryptocurrencies like Bitcoin Cash, NEO or IOTA to Bitcoin, knowing that their funds will be multiplied when the next fork will occur.
At the moment, Bitcoin percentage of the cryptocurrency market is growing and other alt-coins are losing it.
The situation that we are experiencing it is really interesting. A fork that should be harmful for the Bitcoin community and the Bitcoin price, is helping to boost Bitcoin price to new records. In any normal market (excluding cryptocurrencies), if a token splits or divides, both tokens will lose value. But it does not occur in the same way in the cryptocurrency market. As in the past, Bitcoin Cash was a way of having free money, now that we know how a fork looks like, investors are betting on Bitcoin to see further gains after the new split happens.
Maybe this is not just speculation
Some Bitcoin experts believe that there is not a short-term speculation, but a real expectation of long-term gains.
In the long term, Bitcoin price has been fluctuating in an upward trend that has not finished yet. The ban on ICOs in China and South Korea, or the fork that we have experienced in August, hasn’t changed the long-term trend that Bitcoin has. This trend is related to the confidence that investors have in Bitcoin as well as the technology involved, the blockchain.
A former hedge fund manager, James Altucher, told Coindesk that “Bitcoin actually has huge amounts of software and science behind it to make it the best store of value in the world”.
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