In the world of Bitcoin and crypt-currency trading, there are a lot of strange phenomenal where outsiders will find it perplexed to understand.
However, the whole Bitcoin Cash (BCC) saga for the past week is probably one of the biggest soap opera in Bitcoin history where a small group of miners decide to fork away from BTC to start their own chain even thou their motivation and commitment to the new coin are questionable at best.
Let’s be honest here… anyone can fork BTC but this one is special because it is actually driving people to start moving capital into BTC with the hope that they can resell their free BCC upon forking. There is actually a real sense of confidence that people perceive that free money are being created for this entire exercise and are willing to put their own money to bet that they will profit from this. Furthermore, the whole rotation to BTC for BCC has indirect impacted the whole crypto-currency market as demonstrated by the dip in popular ALT coins over the past few days.
So… should people believe in the narrative and buy BTC for BCC for a quick profit?
It is well predicted that prices for BCC will take a big dump once people get their hands onto them post-fork. Just like any market, price discovery will take the direction of the masses and no one wants to be bag-holder of BCC. The drop will be sharp and fast and when it reaches a certain level, buyers will jump in for a quick profit before making another wave of dump as the selling pressure increases due to more people moving their BCC onto those exchange for market sell. Price will be jumpy and since the coins are given free, I won’t be surprise if people will just market sell as they balance the fear of it going to zero and the fact that these coins are free so any profit is still profit to them.
What will be BCC price at the end of 1st Aug? It is everyone’s guess but my prediction is that it will be a fraction of what are the futures trading now.
So will BTC price drop after BCC?
Looking at past history, BTC price is expected to dip as people who bought into the ‘free’ BCC story will start to rotate back to their original holdings — this can be either ALT-Coins such as LTC, ETH, etc. or fiat.
However, if this is any other coins, the drop will likely be sharp but let’s face it… it’s BTC. People will still love to buy BTC especially since the whole BCC drama is over and there are slightly more clarity in it’s path forward (even though the drama will happen again in a few months). I don’t expect BTC to take a big dump but it is not unreasonable to see a small correction to it’s fair value.
Is the dip worth the value of BCC? That’s the big question.
In my opinion, this BCC saga is ultimately a side-show by some miners who is trying to make a point but will not commit to it with their own money. It makes absolutely no economical sense to divert mining power to BCC and since miners are driven by profit alone, the risk is too big to take.
BTC will likely get re-priced to a level that’s straddle between the bump that all these drama are over vs. the artificial pump where people are buying BTC for free BCC.
It’s a question all BTC holders need to evaluate at this time.
So what should you do post-fork?
If you are a holder of BCC, it will be race against time to get your BCC transferred to a BCC-supported exchange to sell off at the quickest time possible. You will also need to quickly balance your BTC before the price correction happens so that you can capture the ‘free’ money. If either moves are delayed, you are more likely to get hit by a loss for a short period of time.
Long term wise… BTC is going to recover from this and in a week time, all these drama will be history and we will be back writing about something else.
Happy trading!
