Bitcoin volatility is about to rise !
What's Happening ?
Tomorrow, July 14th, the BTC1 software will be downloaded by tons of miners, nodes and wallets in order to begin the New York Agreement (or Segwit2x) testing. For more information in what are those, please refer to the article Bitcoin Hardfork for Dummies.
The whole bitcoin community is waiting to see the test's results and that is probably gonna be the main subject of the following days. The price will react accordingly , so that if many problems are found we should expect the price to decline, if it fits well, we should expect it to rise.
Miners have up to July 29th to signal their support for SegWit2x. If 80% of the hash rate signal supports it, the SegWit2x will be implemented on August 1st. As of today, if is expected that this level of acceptance is easily surpassed, but all can change in the next few days.
In case the support decreases a lot, we may expect some sort of bitcoin crisis.
So what ?
The thing is, nowadays bitcoin has attracted a lot of attention from a non-technical public, and the unfolding events are of highly technical nature. If you're not aware of what's going on right now and/or do not have an opinion about it, you should really consider cutting down bitcoin exposure, because otherwise you're probably taking unwanted risks, and that can end badly.
What to do ?
Well, you can just convert it back to fiat. But it is not absolutely necessary to get rid of your crypto exposition to avoid getting caught in the middle of a fight. Also, you may avoid paying taxes by not liquidating your position.
Alternatively, you can convert your bitcoin to some large cap alternative crypto currencies. According to CoinMarketCap, the runner ups are Ethereum, Ripple and Litecoin. You may use famous alt coins exchanges like Poloniex and Bittrex.
Another way is to buy Tether, which is a digital token that is meant to be worth 1 USD each, and it does a decent job doing so. It is available on poloniex.
If you decide to keep your bitcoins, keep in mind that the following events can lead to a Bitcoin Hardfork and check out this article on How to protect yourself from a hardfork.
Hope it helps, Cheers !
Great post. thanks for the info. Followed and upvoted. Feel free to do the same. Cheers
Sure will ! thanks
@pedrombraz
Beautiful writeup!Thanks for sharing.
Thanks a lot for the support ! cheers
I'm in agreement with you. I've been holding more in Litecoin. I'm actually surprised on how Litecoin has been underperforming everything else when everyone expects it to be a protection play.
Do you feel the bitcoins haven't yet gone to the safe haven areas or there is a lot of cashing out to fiat?
I believe investors have not feld yet. We saw a great price decline, that must've been in part due to that, by I suspect not mostly. That's just a hunch though, sorry but I have no evidence to offer ! I'll look it up though.
Agree with you that Litecoin is the most obvious hedge, since it has the same proposition as bitcoin. I don't get why that's not being said much.
This may seem crazy but that is why I am giving the following some thought. EVERY EVERY EVERY article says get bitcoin in wallet that is off and exchange and do not buy for about a week after August 1st. I may keep some money in Tether. If Bitcoin drops enough I may buy on 7/31 or 8/1 and take the risk of missing one of the coins if it splits. There may be such lite activity that getting the main coin at a severe fraction of the cost may be worth it. The rise in Bitcoin over the weeks following August 1st is expected to be very strong if all goes well. This strategy would be a GAMBLE not an investment. Put in $100-200 on a buy just to see what happens. Maybe, it will be like buying Ether on the flash crash.
We're on the same page. I honestly don't think the "exchange" risk is super high. Any exchange who doesn't distribute the duplicate tokens to users is sure to be blacklisted by the community. But on my posts I always try to be very sober and factual about stuff. Still I dig your move. I'm not moving completely out of bitcoins.
Great write up, it helps provide avenues that newer readers can take and even links that they can learn more about it.
Absolutely ! Do you think the majority of readers on steemit are experienced users or new ones ? I always duel on writing for beginners or experienced traders.
I would write more to newer users as the rate at which new accounts are created are exploding, plus with the rise in price of the coins more and more people are learning about them.
Makes a lot of sense. Thanks for the tip !