Hold the fork – SegWit2X called off, Bitcoin drops like a stone. Switch to options like (HIVE.V)

11/10/2017

Today the leaders of the faction planning to fork Bitcoin announced the move is off. This means the blockchain will remain unified for now. This new development doesn’t mean the idea is dead. A hard fork could still rear it’s head in 2018.

I wrote about the impending BTC split last week. After a day’s trading on the news the fork was dead, here’s what BTC looks like Friday night.

 

If you shorted BTC because you thought this was a bubble, and everyone was crazy, I bow to your foresight. Hedging turned to rapid profit-extraction. The overall value has dropped 6 per cent in 24 hours.

What’s next?

For now, the main BTC blockchain remains intact, and we’ll have to see if the concerns over the size of the transaction volume becomes unwieldy. Another risk is if a really big player comes in and has the potential to control 51% of the pool. If this happens, they could undermine the whole works. I’ll have a piece on this threat later this month.

If technical problems do crop up, the faction that started the last fork could become active again. Hopefully the more conservative upgrades will be effective enough that we won’t see another merry-go-round.

Investing options.

With the future of BTC uncertain, and the big players dominating the mining and trading, what’s your move as a retail investor? I think the environment makes investing in alternate blockchain companies a big winner.

You can look at sidechains. Investing or mining these can be easy and their use in the larger BTC ecosystem is pretty nice too. Stuff like Ethereum, or RSK could be a good way to get an early position in this area. These could grow in intrinsic value, or if the gods be good to you, become a new tech standard.

Of course I would also suggest looking at blockchain companies such as HIVE (HIVE.V). Solid companies in this market with good tech are good bets. We’re at the Model ’T’ phase of this technology. You have the opportunity to invest in the company that will produce the first windshield wipers, or air conditioning for future cars.

This bitcoin stuff is really interesting and can be pretty daunting. Over the next few weeks, I’ll do a series with easy to understand content that cuts to the chase about how it works, and why it’s cool.

FULL DISCLOSURE: HIVE is a client, but I don’t own stock.

 

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Comments 1

  1. Unhinged Trader says:

    Great summary of events, but have you made sense of the ensuing Bitcoin Cash drama that depleted capital from BTC and inflated the price of BCH to $2000?

    This didn’t seem like any organic activity.

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