Bitcoin Software Update- Potential Opportunity for Ether
The Scoop
Segwit2x is the software update that is scheduled to begin tomorrow, a plan that appears to be popular amongst miners as well as developers. This update will double BTC'S blockchain capacity over the course of 3 months and will send signature data outside of the blockchain, in order to alleviate Bitcoin's processing bottleneck. According to Coin Dance, 90% of miners approve of this proposed solution. This of course is only a voluntary sample size and therefore could be quite inaccurate. The goal of developers of Segwit2x is to have an 80% rate of acceptance by miners, something that may or may not happen.
Likely Outcome
To be clear, I am of the opinion that in the long-run this necessary adaptation will prove to be little more than a bump in the road. BTC is a lot more solid than news outlets and traditional investors give it credit for. That being said, I still believe that this update and the coinciding confusion will open up an opportunity for crypto investors. I believe that this shift will cause a short-lived spike in BTC price volatility and could result in it taking a hit. In the long-run the doubling of BTC's processing capacity is going to be lucrative in it's future growth and is a VERY positive development.
Possible Opportunity
As we have seen in past BTC slides, Ether tends to increase in value. This is all speculation of course, but I think that buying in on some Ether this week will provide a respectable return in the coming month. I typically only like to recommend mid to long term value investing, but as we are all well aware of, digital currencies provide some extremely attractive short plays. In this case, I am going to throw some $ into Ether and see what happens. I would be willing to bet that we see Ethereum gain some market share and that crypto investors dump more capital into this alternative.
To Conclude
Most of the skepticism around processing issues and high transactions fees is much ado about nothing. BTC will adapt and continue to be the leader in digital currency. To reiterate, I believe that this will still create an opportunity for a nice play on Ether. Apologies for lack of detail, I have been meaning to create this post for some time but have been procrastinating...now it's midnight and my brain is starting to fade. I hope that you find this post at least some-what informative! The bottom-line: Right now is a good time to allocate whatever % of funds you deem fitting into an investment in Ether; I think you will be satisfied with the results over the next few months.
I think we are starting to see a different price correlation of ethereum from bitcoin, its slowing taking his path
Definitely a possibility, this post was a vast over-simplification and I honestly haven't put too much effort forth as far as quantifying and analyzing the relationship between the two. It will be interesting to see what happens! I have access to a Bloomberg terminal (which would be a great tool to study the correlation between Ether & BTC) however, I'm not sure if Bloomberg has Ethereum data yet :/
So we should invest in Bitcoin or not? @seemitsteve
Absolutely, I believe that Bitcoin's long-term prospects are solid. Like anything, it's typically not advisable to put all your eggs in one basket (ie putting some $ into another cyrpto currency like Ether). I would recommend investing mostly in Bitcoin, but dips like this provide opportunity for alt coins like Ether. Hope this helps!