Bitcoin hardfork is up nearly 200 percent in a week. We are talking about Bitcoin Gold, a cryptocurrency that appeared back in 2017. From April 5 to April 9, the cost of BTG rose from about $ 40 to $ 111, while daily trading volumes reached a local record of $ 250 million.
There is a possibility that many new traders simply bought the “wrong coin”, that is, the growth of the altcoin is caused by the usual carelessness and inexperience of a large number of market players. Here are the details of the situation.
As a reminder, Bitcoin Gold became one of the many hard forks of the original Bitcoin in 2017, when Bitcoin Cash, Bitcoin Diamond and other similar coins also appeared. That is, the developers use the existing BTC blockchain, add some changes to the project and branch off in the blockchain, creating a new project.
For example, Bitcoin Cash was prompted by discussions around the Bitcoin block size. As a result, the creators of BCH increased this parameter and created a new cryptocurrency. Although the intensity of user use of the project later showed, it didn’t make much sense.
Unlike the “original”, forks usually do not achieve massive success. Even with the rise of most altcoins, BCH and BSV, for example, continue to lose value when paired with Bitcoin. This means that investors are betting on the original project, which has been operating since 2009.
Although sometimes there are exceptions. Inexperienced investors can really see in the already mentioned Bitcoin Gold and Bitcoin Cash only “cheaper” versions of Bitcoin, because they do not understand the difference between projects and the essence of forks. And since beginners usually have little money to invest, they choose a cryptocurrency with a more attractive price tag.
It may sound incredible and strange, but it really happens.
Why is Bitcoin Gold growing?
Brazilian investment bank BTG Pactual is one step closer to launching a crypto fund this week – the organization has partnered with Gemini, a cryptocurrency exchange founded by renowned billionaire twin brothers Cameron and Tyler Winklevoss. The bank itself has nothing to do with Bitcoin Gold, but its name has an abbreviation for the altcoin ticker – BTG.
It looks like this coincidence was enough for many buyers, Cointelegraph reports. After the news about the partnership appeared, the Bitcoin Gold chart quickly crept up. It seems that many have indeed traditionally perceived BTG as a “cheaper” Bitcoin.
In comparison, last year the project and the startup Phala Network entered into a partnership, but this news caused almost no reaction on the altcoin chart. In other words, this time its growth was associated exclusively with hype, experts say.
Thanks to such events, it becomes clear that there are more than enough newcomers on the cryptocurrency market. However, there are also professionals – and they are actively buying up coins. On the eve, Hong Kong-based tech company Meitu increased the total value of its cryptocurrency reserves to $ 100 million after the company announced Thursday it was buying BTC for an additional $ 10 million.
Meitu Inc’s subsidiary Meitu HK acquired 175.67 BTC for a combined equivalent of $ 10 million at an average purchase price of $ 57,000 per coin. The purchase was reportedly made using available cash reserves in the spot market.
Earlier, Meitu representatives stated that the company could not have made its previous purchases without the help of the Coinbase cryptocurrency exchange in the United States. The latest report on Coinbase was not mentioned, but in the past, the exchange was responsible for managing investments of other legal entities like MicroStrategy.
We believe that such behavior of the asset could indeed be a consequence of the inexperience of investors. High-quality investment in blockchain assets requires deep knowledge and understanding of what is happening in the niche. Otherwise, those wishing to invest money will really perceive BCH and BTG as “more affordable versions of Bitcoin”. And this once again proves the youth of the blockchain industry.