Bitcoin Cash – The Winner of the Hard Fork is….. Zcash?

Overview:

The upcoming hard fork will separate into two distinct chains between the ABC and nChain’s since there is dissent amongst teams.  What does this mean for us holders? Well we are going to get two coins at the end of the fork and which one is adopted only the future beholds.  Maybe both, but I am not betting on this.

So what are we doing?  Is this a buy the rumor sell the news event?  Or is this going to undermine BCH for the future?  This will depend on mining pool support, and more importantly disruption to payment processing.

Leader in Merchants:

Bitcoin Cash has pushed heavily to be a leader in merchant services, and has been widely adopted in Japan and other places.  The question I am asking; is this a setback for BCH moving forward?  Could the winner of this actually be Litecoin, Dash or Zcash?  Let’s not forget the strength of any currency is based on two things, mining node and merchant / user adoption.  

The Fork:

So not all mining pools are have been accepting of the new ABC “software update”, including nChain and CoinGeek.   This may have been fine a year ago, when we all doubled our money “allegedly” but moving forward mainstream merchants may not take this so well. 

For crypto to be mainstream in merchant services there needs to be consistency, which is why I think this may hurt cryptos that are doing hard fork splits moving forward.  Not an issue right?  Unless you are taking Bitcoin Cash payments and you have to “pause” taking them, worry about your wallet and the fork, and have to re-establish new wallets for more coins.  Imagine if merchants had to “pause” taking Visa payments because there was a Visa split, then wondering if they payment processors will side with MISA or VISA.  Yes CC processing is much different but the point is the same.

The Winner:

The winner in the end is likely going to be a united currency team where merchants and the public see a simple solution, payment processing, not a hard fork where there is a split of developers.  In the tech world and blockchain groupies hard forks like this may be cool, but for merchants and retailers not so much.  Coins that have a leader with united team, a consensus and decentralized node network is going to emerge as winners in the end.  At least IMO.

So we missed the initial move so what is next.

BCHUSD Weekly:

Upset you missed an initial impulse move is thinking wrong.  This is trying to time tops and bottoms and long term is a losing proposition.  More often than not these initial spikes provide future opportunities not current ones.

How many times have you bought into a rally such as this and the next day your like crap, I fed right into the FOMO.  No matter how many times this happens the market does the same thing.  Sure this could be the one time it just continues to rally out of control to 2400, but really?

IF I had a position from lower prices, I would be looking to trim off a little here, not add on.  Of course you can hold for the fork this is up to the investor.  To me I like to take at least some profits when I can, not hope the market continues to run.  Keep in mind I bought BCH a year ago at $300+ and the current coins I am holding are free.  I am just holding through the fork here.

Calm Down:

BCH is just a few 20 pts away from its first minor resistance level.  There are a series of overlapping levels of importance and where we are likely to see traders take profits, and late FOMO’ers scared out.  Yes there is a possibility we just keep moving higher, but statistics say we get a pullback somewhere.

Yet major resistance, initially, is not until the 880-960 area.  We are a long way from Kansas Dorthy, so don’t get all caught up in the “I missed out” moment.  You didn’t, and you only need to look historically at the moves and final results to verify we probably didn’t miss anything.

IF and WHEN a pullback happens no one knows for sure, but our stance is, I would rather miss the initial move, and buy a continuation, than buy into a rally and deteriorate my capital.  Keep in mind we are getting some benefit in our portfolio, and we have a few position trades that are starting to move positive here.

Moving Forward:

As cool as it has been to get a fork, moving forward I am anticipating this is not going to be sooooo cool.  Yes it was all the rage last year, but from a merchant and security perspective for wide spread adoption hard forks resulting in a split are not too cool.

This just brought BCH down a notch in my book, but I will withhold judgment until after the fork.  I see this as an opportunity for more collaborative coins, with less drama to take market share.  IF I was any of the other coins, I would be marketing on this alone, especially Dash, Litecoin and Zcash.

Summary:

Buying into the FORK may leave you just that, Forked!  This is not even a buy the rumor sell the news, it is by the hype and hope you don’t get bite.  I’m standing aside, and as the market is showing signs of improvement, we will look to start being more active in trading.

 

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