Why I Prefer Altcoins Over Bitcoin for 2X Hard Fork
Bitcoin SegWit2X hard fork will happen around November 16th. As such, many people have invested in Bitcoin in hopes of getting “free money.” Any holders of Bitcoin will also be awarded Bitcoin 2X going into the hardfork. This is a much more serious hard fork than the Bitcoin Gold hard fork. The lack of replay protection and the schism this hard fork is driving into the community should increase risk and theoretically lead to Bitcoin consolidating.
Instead, Bitcoin continues to rise with very few down days and has had nearly no dips (15% drawdown) since the China ban on exchanges. The one dip that happened after the Bitcoin Gold hard fork (where Bitcoin dropped from a peak of roughly $6200 to $5300) lasted less than a day before rebounding. This concerns me from an investing perspective as it illustrates a completely “risk-off” approach from investors in the market.
While institutional money is coming to Bitcoin, I imagine they are not the key driver behind this run. Most institutional investors will wait for a dip, and at this point, likely a correction (30% drawdown). It will still be a while before an ETF gets approved.
Given the immediate risks associated with Bitcoin going into the 2X hard fork and the amount of FOMO investing, I feel it is safer in the SHORT-TERM to invest in altcoins. Naturally if you are a Bitcoin maximalist or otherwise only understand Bitcoin, I would dollar cost average rather than lump sum invest. Dollar cost averaging is likely a good idea with altcoins too right now given the uncertainty for them while Bitcoin is doing so well.
As always, I’m open to hearing your thoughts. Thank you for watching.
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