Not every crypto investor pray for hard forks but the savviest of them knows how to glean the most from a hard fork situation, not to mention popular crypto metrics such as market cap might not be all true when it comes to side coins.
The Other Side of Side Coins
News of a coming hard fork does not bode well for many enthusiasts, while for others it is a time to construct attention seeking speeches to chastise beefing factions trying to form their own rogue chain. It is all a flurry of too much excitement, negative or positive, but it is all there, brimming and frothing and making the whole crypto community to speak at once.
However, savvy crypto investors read enough into situations to realize hard forks are not all about noise. Or literally all about noise, and we all get caught up with it the journalistic euphoria. For one, comparative metrics such as market cap and transaction per day might be all funky with the wrong calculations especially when it comes to side coins, but we don’t know that. If we knew, what would we do anyway? How would metric calculations for side coins be wrong?
First, let us take a peek into the clinical mind of a savvy investor who knows his trade, and see what we might be missing within all those noises. The first checkpoint, a hard fork is a month away: brilliant! Bring in the whales. They are the whales. A whale isn’t a crustacean; it is a powerful investor with stakes of up to a hundred thousand bitcoins and whose activity alone could drive bitcoin market. We’ve got a few whales in the crypto-cean, and two or three moving alike might just create a significant wave.
In our first checkpoint, we see a hard fork coming on bitcoin blockchain. The first instinct is to go to Twitter—and its sister Medium— to rant about the insolence of factions chasing neutral institutions from investing in Bitcoin. In the mind of this whale, that first impulse does not hold water (pun intended). What does hold is that a hard fork presents a chance to earn more? How does a hard fork work? When Bitcoin split into bitcoin cash and bitcoin gold, it wasn’t really ‘split’ in the sense of the word; instead, it got cloned. In the digital world, that is just very possible. Say you have 1000 BTC in your wallet before the ‘split,’ you end up having that same 1000BTC with extra 1000BCH, with your software wallet supporting both.
Little wonder most whales move to buy more bitcoins (or the crypto-coin in particular) prior to a hard fork, to sell off the newly acquired side coins once they fork happens, making millions of dollars in the process. This is why metrics concerning side coins are all funky, not everyone possessing it are really interested, and they are just holders by default.
Lack of coin movements, default holders value, and dependence on their parent UTXO set, are just a few of the many reasons comparative metrics regarding side coins might not be all that they seem.