Many people think Bitcoin forks are unnecessary. The truth is that they generated enormous wealth for Bitcoin investors in the last quarter. The total figure which was generated for the investors stands at $ 44 billion just in the 4th quarter of 2017. When you put it in proper perspective, you would realize that it is almost 8 times than the amount of money which was raised by ICO’s. The amount of money raised by it was around $ 5 billion.
What is a fork?
4th is the generation of a new cryptocurrency by dividing the existing one on the basis of technology or on some other parameter.
During 2017, 2 of the forks which were created by Bitcoin were Bitcoin cash and Bitcoin gold. Bitcoin cash has a valuation of around $ 18 billion and is currently the 4th the largest cryptocurrency by virtue of market cap. Bitcoin gold has a market cap of $ 1.7 billion and is currently ranked as the 20th most valuable cryptocurrency. According to some reports, Bitcoin would be undergoing more and more forks this very year. The total number according to a report stands at 50.
This year, in particular, has been volatile for not only Bitcoin but another cryptocurrencies as well. Even then, the total wealth which has been generated by the Bitcoin forks is enormous. Many investors fear that the current rise in cryptocurrencies is nothing more than a bubble. Owing to this very reason, the volatility in Bitcoin is immense. Also, owing to the futures trading of Bitcoin by many exchanges, investors fear that the fall in cryptocurrency would also result in a fall in the financial markets.
As of 2018, most of the cryptocurrencies are actually on the lower side. Even though a rebound at present is underway but they are still far away from their peaks. In addition to that, when you speak specifically about Bitcoins, it is lower by almost 60% from the peak which it had touched recently. This is one of the main reasons why investors are still worried whether Bitcoin would be able to eclipse the earlier highs or whether it would remain in this range for a long period of time.
Many of the cryptocurrencies are showing trend reversal patterns which indicate that they would rise pretty soon but the truth is, with the path which they have to cover being so large, it would be very difficult for them to hit new highs after crossing the ones which they have created recently.