Bitcoin is currently experiencing its latest boom, and at the time of this article, its price has reached $7000, a more than 1000% rise since the beginning of the year. But why is it rising and how will it be affected in the following weeks or days?
In the next days, Bitcoin is expected to go through an additional chain-split (fork), thus creating a parallel cryptocurrency called B2X. By logic, all wallets containing bitcoin at the moment of the fork will receive the additional currency. In fact, it is one of the biggest reasons why Bitcoin is witnessing such a significant increase in demand. However, you must be aware that once the split happens, most of the money will have to move somewhere else. It is economically impossible to create value out of thin air, and by logic, the current inflation will see a significant correction.
According to previous trends, the whole market is expected to see a correction before regaining track. It is at that moment that most people will encounter themselves holding a stack of entirely different 'bitcoins'. How will industrialized investors react to this and what will the general public have to say? While it is impossible to predict, it seems that this might not be a very welcoming outcome.
On the other hand, the purpose of these forks is to scale the network to accommodate a higher rate of transactions. Consequently, if you are looking at the chain-split with long-term intentions, you might not be affected by this event. However, once the market realizes the fundamentals behind this latest 'boom', it will quickly retract and probably take its eyes off bitcoin for some time.
In conclusion, if you are looking to profit from the upcoming chain split, you might probably reconsider your position and instead invest once this mini-bubble corrects. After all, there are numerous more important events coming for cryptocurrency at the end of Q4. Why not make more secure decisions?