If You Don't Trust Bitcoin and Aug. 1st - Hedge with SBD
If Aug. 1st is making you nervous, you are definitely not alone.
I was very excited about the Segwit getting miner consensus, but now yesterday a group of miners and rich chinamen decided to fork the chain. That, I am not excited about.
I hear many people telling me to get a personal bitcoin wallet (own keys) so you can profit off the multiple chains and the forked coins you will receive for free.
Honestly, I find that idea completely flawed and I don't like it.
What if these forks leach value from the true bitcoin?
I see bitcoin crashing if there is a war over which bitcoin is the true bitcoin. I don't see anything good coming from a hard fork at this moment in time unless the mass majority of miners are in agreement (literally 90%+).
What if BTC crashes to $1,000 and the Forked coins only amass a combined total of $500?
That is $1,000 lost value per coin!
What most people are expecting is that Bitcoin sigwit will remain a constant price while also receiving an equal share in the Forked BTC Cash and that this token will also have significant value.
But where would the money come from?
Currently Bitcoin has a market cap of 41 billion. Even for BTC cash to have a value of $250, you would need $4.1 billion injected!
I don't see it. That type of money doesn't just appear overnight.
For me, I only see the market reacting negatively. I see the market cap shaving billions to either hit the side-lines or to invest in alternatives like ETH, LTC, XMR and other "Better Tech" coins.
STEEM DOLLARS
Steem Dollars (SBD) are an asset that is essentially pegged to a dollar, which in turn is valued against bitcoin making 1 sbd = $1 btc.
For example.
- If bitcoin was valued at $1,000 : 1 SBD would be worth 0.001 BTC
- Bitcoin at $2,000 : 1 SBD is worth 0.0005 BTC
As basic as it can get, Steem Dollars are worth a dollar in Bitcoin
Well, at least it's supposed to be like that. History has shown that SBD doesn't exactly Peg perfectly, for the majority of last winter SBD was valued under $1 but this summer SBD has been valued higher than $1 (Sometimes nearing $2).
At this current time, SBD is under $1 probably due to the wild price swings BTC is having right now.
-Bitcoin is roughly at $2,500 : SBD is trading on Bittrex at 0.000375 : 2,500 x 0.000375 = $0.94
HEDGE
Because SBD is currently undervalued and Aug. 1st is only a few days away. Using BTC valued at $2,500 to purchase SBD will bring a ~7-8% discount and you will most likely retain your $$$ value through this nasty storm that is brewing.
If bitcoin value collapses during this period of time, SBD/BTC will most likely Skyrocket due to the mechanics of the dollar peg. In this scenario, it could take months to sort out the true nature of Bitcoin and ultimately for any price recovery to occur. If and when a true bitcoin does emerge, there should be plenty of time and signals to easily convert the SBD to the Bitcoin the markets are choosing to support, which should also be more than the BTC originally invested.
Hedging out of Bitcoin is my method of surviving the Aug 1st declaration of war
Ultimately, it's your decision if you choose to make one. For many people, Aug 1st won't effect them and they could care less. This whole issue could also be blown out of proportion and Bitcoin segwit could explode out of this solar system overnight.
I am simply providing an option with good merits
Thank you for reading my posting on Steemit
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@generation.easy
a bitcoin fanatic and alt-coin enthusiast
Well thought out and a great way to save yourself lots of money in case Bitcoin does take a harsh plunge to the downside...............Thank You fellow STEEMIAN
Thanks. Finding good ways to diversify and hedge is what im looking for right now
That's a nice alternative, great post!
I never thought of doing anything with the small amount of bitcoin I have on bittrex. This really makes sense to trade into SBD, I might do this.
Good information, resteemed
thanks for resteeming!
Using Steem Dollar is a great store of money.
Even when SBD is under a dollar you know you will make profit as the witnesses will do everything that can to recover it back to $1 so you can make some profit there.
Great suggestion @generation.easy
for sure. at this point, if another wierd pump happens, you could almost get 2x
@generation.easy ive turned most of my BTC into LTC and some into SBD (might put it into steem power just need to take it from my offline wallet first) so i feel quite safe about aug 1st as when the price drops ill turn my LTC to BTC again
Why just LTC and SBD? Why not buy some Ripple (XRP), as well. Ripple is partnering withsome of the most prominent banks and financial institutions to facilitate cross-border payment solutions. If global brands like Standard Chartered, Bank of America Merrill Lynch, Royal Bank of Canada etc. are showing confidence in it, its no wonder it has seen a 3000-4000% growth in the last few months. Best of all, it still has a ways to go before it reaches its full potential. It's a must-buy, if one is thinking of holding long term.
I have seen some banks adopted ripple but the time to invest would have been before the banks started to use it so i benfited from the 4000% increase i might invest in namecoin that seems to have potential, do you hold any cryptos @fuchsia.ink ?
I'm a newbie to this fascinating world of cryptocurrency! Still trying to find my bearings. I have started building my portfolio with a little bit of ethereum, some bitcoin and some neo and plbt. I'm planning to put some money into ripple and maybe sia coin. What abou you?
essentially we are looking at short term trading options to help mitigate loss and potentially making a profit.
I see SBD being a near guaruntee to hedge against in case bitcoin plummets.
LTC should also be a solid move due to it being a currency in nature and 2nd to bitcoin
Although I find ripple to be a long term investment. I don't believe this down trend has ended. The large XRP holders are central figures and full of manipulation
thanks for the comment
Ltc seems to be a safe bet and could find another All time high during this event
@generation easy i might invest in name coin it looks to have potential, its expected to grow quite large
Yeah, im not too big of a fan of the old blockchain tech. Nmc/ppc have this wierd link in price too that confuses me. But, something the new projects dont have is that the old tech has some old investors with large bankrolls... so who knows.
If your a long term holder, i expect at one time or another you will have the opportunity for profits though.
Considering, that LTC has pretty much held its own during this unpredictability, your prediction may very well come true.
Very good information. Thanks for sharing with us.