Buying Bitcoin: August Updates, Bitcoin Cash And Litecoin
Aug. 9, two thousand seventeen 8:52 AM
- Bitcoin has passed its potentially scary August 1st deadline and has hit all-time highs every day this week.
- Adoption news is coming out, most recently with Overstock.com accepting crypto and holding half its Bitcoin.
- Bitcoin Cash and Litecoin are Bitcoin alternatives that have gained serious market cap; and could menace (or bolster) the future value of Bitcoin.
Well, the foreshadowed August one st date has officially past and we’re watching how Bitcoin has responded to moving pasts its latest obstacle: it’s up almost 50% from its value exchange one month ago.
Bitcoin has hit its all-time high almost every day this week and shows no signs of stopping. Bullish calls are that it could hit $Five,000 and those calls are not for too far into the future. As with all things, there are naysayers like Bank of America’s (BAC) Francisco Blanch, head of its Global Commodities and Derivatives Research, that say widespread acceptance is needed before the price means anything.
Well, some of that might be headed our way. Overstock.com (NASDAQ: OSTK) announced recently that it would be accepting Bitcoin (and other coins) through a partnership with Shapeshift, an online exchange. But that’s not all. Overstock also announced it will be holding 50% of its incoming Bitcoin, a clear sign of bullish feelings from the online retailer.
So all is well and good in Bitcoin world, yes?
Well, almost. There are a few other coins contesting for space with Bitcoin—and that battle will need to be cleared up to truly understand the long-term value Bitcoin might hold. The two coins are Bitcoin Cash and Litecoin. We’ll look at both here.
Bitcoin Cash is one of the newer coins to market—the direct result of the August one st hard-fork on Bitcoin. Its existence can be as mysterious as its value is volatile right now.
Bitcoin Cash was created to take the place of limitations some spotted on the Bitcoin platform; mainly the speed at which the platform can process transactions. In a elementary way of thinking about it, Bitcoin can process about four transactions per 2nd. Visa (V) for comparison does about Two,000. Miners and Bitcoin enthusiasts witnessed the need to scale this as such a pressing issue that they were willing to split Bitcoin (which is what August one st was all about). So anyone Bitcoin in existence on August one st was copied and its proprietor was given Bitcoin Cash (BCH) for it.
Since Bitcoin Cash has become its own entity, it has accrued $Five.5billion in market cap and is presently the four th most valued coin by that same metric. Its price has been as low as $234 and as high as $727 in just its very first week. Most investors are staying away, but recall that this was given to anyone investor who also possessed Bitcoin. So, the expectation is that there’ll be a dump of these once exchanges permit for it. That starts August eight th and will have significant influence on Bitcoin and other coins—Ether, for example.
I foresee an enormous purchase of Bitcoin from those selling their hard-forked coins, which could thrust Bitcoin’s value well up near the $Four,000 mark by mid-August, with some regression to be expected from such an enormous one-off pump.
On the other side of this is Litecoin, a long-time Bitcoin competitor. Its main purpose is very similar as Bitcoin Cash, a lightweight version of Bitcoin that can process swifter. It, however, has been around for more than four years and has had major standing and stability (I say this with the extreme relativity of crypto as a entire). Its market cap and value chart has followed almost lockstep with Bitcoin.
Unlike Bitcoin however which does not have one leader, Litecoin has Charlie Lee, its founder and director of its vision. Charlie left the Litecoin project to work for the popular exchange Coinbase, only to come back this year. Litecoin fans responded enthusiastically to this.
Litecoin and Bitcoin Cash are similar enough however that Litecoin has seen some flatness while Bitcoin Cash attracts fresh money looking for a boom. This marks one of the very first times Bitcoin has seen a major boom (50% in the last thirty days) without Litecoin joining on the same growth trajectory.
Litecoin will need to see what happens with any Bitcoin Cash movement before one knows it’s real value; and then it’s still a race to see adoption with Bitcoin at large. If retailers aren’t eyeing the value of Litecoin, it’s hard to make the case for consumers who see Bitcoin’s fame grow further and broader. I see Litecoin outlasted Bitcoin Cash, as it does have some smaller technological advantages, but I don’t know if those will carry it to utter adoption.
Both Bitcoin and Litecoin have a bright instant value proposition with Bitcoin Cash sell-offs coming. I think Bitcoin can rail out its early adopter news to even greater heights and I don’t think $Five,000 is unobtainable this year. It does have some issues to solve for and other coins are embarking to truly produce technology that can serve their niches, so there’s some cause for caution.
Still, two thousand seventeen will be the year of cryptocurrencies very first rise and Bitcoin is still the leader of the pack, despite some competition among other top5 market cap currencies.
Disclosure: I am/we are long BITCOIN, LITECOIN AND BITCOIN CASH.
I wrote this article myself, and it voices my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.