Bitcoin Hard Fork 2017 Is a Reality
Investors hope that Ethereum prices will escape the summer doldrums, but what about the Bitcoin hard fork in 2017? Won’t that spark a crisis of faith in cryptocurrencies, leading to more pain for Ethereum?
I doubt it.
Don’t get me wrong, the potential fork of the Bitcoin blockchain is real. I don’t want to diminish those concerns because the split has already happened. .
In other words, we’re about to have two versions of Bitcoin: Bitcoin and Bitcoin Cash. You’ll see them listed as BTC and BCH, respectively.
I personally believe that Bitcoin Cash will fail. Not that its value will shrink to zero, but it will fail to replace Bitcoin as the market leader in cryptocurrencies. Plus, it will fail to attract the bulk of Bitcoin investors, which counts as failure in my book.
Most people don’t even understand why the Bitcoin fork is happening. Yet they’re supposed to abandon Bitcoin—the name they know and trust—for a random offshoot? Ha!
Anyone familiar with investor psychology knows that this is an absurd idea. CoinMarket shows Bitcoin Cash futures trading at $344.52, or roughly 12.5% of Bitcoin’s current value.
Put another way, investors don’t really believe that BCH will replace BTC!
It’s like the counterfeit handbags sold on Canal Street in New York City. Some of the bags says “Pradu” instead of “Prada” which is why they sell at a fraction of the price. They aren’t the real thing and everyone knows it.
Likewise, investors aren’t willing to pay full price for a Bitcoin knock-off. But I digress.
Now that the Bitcoin fork is reality, we need to consider its impact on other cryptocurrencies—namely Ethereum.
Will Bitcoin Fork Hurt Ethereum Prices?
In the chaos between Bitcoin and Bitcoin Cash, there is an opportunity for investors to make significant returns on Ethereum. Think about it: BTC and BCH aren’t the only options for cryptocurrency bulls—no one is putting a gun to your head, making you choose.
One option is to leave the crypto market entirely, but those who felt that strongly likely exited the market during June and July. (Hence the drastic correction in crypto prices during those months.)
Another option is that funds are rotated within the industry. That is more likely.
My guess is that investors fleeing Bitcoin will flee straight into the waiting arms of Ethereum, its leading contender. Although Ripple and Litecoin are close behind, followed by hundreds more, the heir apparent is no secret.
So when you consider the potential influx of capital into Ethereum, it’s easy to imagine ETH prices reaching $400.00 by autumn. Further down the road—in 2018, let’s say—prices could accelerate past $1,000 to as high as $1,500.
At Profit Confidential, our Ethereum price predictions are already on the bullish side. Therefore, it is not necessary for us to increase our ETH price forecasts, but many other publications could begin to do so if this rotation comes into effect.
So keep a close watch on Bitcoin volatility in the weeks to come, particularly in the week following August 1. The potential fork of the Bitcoin blockchain could become a catalyst for other cryptocurrencies, especially Ethereum.
What About Bitcoin Prices?
It’s important to understand that Bitcoin price predictions can vary a great deal depending on the time frame we’re discussing.
In the short term, the specter of a Bitcoin hard fork in 2017 weighs heavily. It looms over everything.
This is because Bitcoin Cash represents an alternative scaling solution for Bitcoin, one that may be superior to the original Bitcoin. The block size increase of BCH might be more important than BTC’s newly activated Segregated Witness. We don’t know yet.
But that doesn’t mean the superior technology is guaranteed to win.
I maintain that timing matters in business. Right now, the United States Securities and Exchange Commission (SEC) is seeking to regulate cryptocurrencies. Which do you think is better positioned to receive regulatory approval: Bitcoin or Bitcoin Cash?
My guess is the former. Using its brand power, Bitcoin can add a regulatory hurdle between itself and Bitcoin Cash. This might earn it enough time to innovate new scaling solutions, should SegWit prove inadequate.
As such, the long-term view of Bitcoin is still fairly sunny. We maintain our bullish position on the original cryptocurrency, with a Bitcoin price prediction of $4,000. I’m certainly not giving up hope on BTC yet.