Tuesday, March 28, 2017

As future of Bitcoin continues to be up in the air, investors looking towards other crypto-currencies for less risk

While the future of Bitcoin is still up in the air due to the fight between two conflicting paths on how it should be managed and processed, speculators who have been at the core of recent price moves are now seeking alternative crypto-currencies that may provide less risk.

At the current time Bitcoin is not likely to implode if either of the two camps (Segwit and Bitcoin Unlimited) are successful in overtaking the other in their goals to improve upon the original and outdated blockchain setup, but the outcome will effect confidence in what is still a fringe and slowly maturing alternative form of money.  And as such many of the individuals and institutions who currently are in Bitcoin are appearing not to be afraid to take their profits and invest in other burgeoning crypto-currencies that at this time are less expensive.

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It's been a volatile period for bitcoin investors, as holders of the crypto currency prepare for a potential 'fork' in the blockchain. 
From Friday morning until Monday afternoon, bitcoin was trading under the $1,000 level, and even fell beneath $900 on Saturday. This is significant as, barring the weekend of March 18 and 19, bitcoin has traded above $1,000 since early February and hit a fresh all-time high of around $1,325 on March 10. 
Bitcoin faces a scaling issue, where the number of bitcoin transactions that can happen on the blockchain at any one time is limited. This is creating a backlog of transactions that are needed to be processed and slowing down the system. 
As a result, investors are hedging their bets or selling out of bitcoin, waiting to see whether or not the fork will happen, and if so, which blockchain will be favored by the market. 
Data from Bitfinex indicates around 49 million more coins have been sold than bought, or roughly 5 percent of total coins traded, in the last 30 days. Through March, the number of long bitcoin positions held by investors has decreased from 26,858 to above 23,142, while the number of short positions has increased from 9,820 to 14,731. 
Meanwhile, the market cap of blockchain assets other than bitcoin, such as ether, dash and monero, has more than doubled since March 10 from $3.5 billion to more than $7 billion, according to Chris Burniske, blockchain products lead analyst at ARK Invest. 
"At the same time, bitcoin's market cap has gone from $19 billion to $16 billion. Hence, bitcoin's market cap has lost $3 billion in value while the combined market cap of all other blockchain assets has added more than $3 billion," he told CNBC via email. 
"Given these market indicators, it would appear investors are diversifying their blockchain asset holdings, positioning themselves for a generally rising tide in this emerging asset class." - CNBC

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