Now, you may be wondering isn’t the benefit of having a cryptocurrency knowing there is a finite amount. Well, that depends on who you ask, but people are criticizing this second hard fork because it may begin diluting the market and confusing people who are new to the market and are unfamiliar. First there was just Bitcoin but now there are three Bitcoin products and this can be intimidating.
For people who know the market and know what they are looking at, this may not be all that negative, but rather another avenue to make money. It is difficult right now because there are two ways people are approaching Bitcoin and that is either to invest or use it as a form of currency in a transaction. I think it is fair to say that the end goal is to have it be a form of payment in the mainstream, but right now it is being used as a trading vehicle. On top of that, you have people looking at the technology behind the face.
Seeing a hard fork is nothing new, but when there is creation of more and more variations, people who are new can begin to lose trust. Why would someone invest or use Bitcoin if there could just be a hard fork and a new currency created, potentially diluting the market and dropping the value of the original product. This is a difficult decision because there are many different avenues to go.
For those who held Bitcoin, you may wonder what to do and that is difficult. In theory, you would think all of the prices would react similar since they bear the Bitcoin name, but that is unlikely to happen. There are almost too many cryptocurrencies out on the market and adding more could over complicate the situation. The goal is for this to be a main form of payment and it certainly has the potential. However, we have to be aware of the growing pains and what lies ahead in terms of splitting and adoption of the product.
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Try AI Portfolio ArchitectNathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
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