Bitcoin Flash Crash Opportunity Due to 'Cashening 2.0'

in bitcoin •  7 years ago  (edited)

Bitcoin and Bitcoin Cash are back at it again as Coinbase / GDAX launch Bitcoin Cash trading. In the first 3 minutes of trading, Bitcoin Cash spiked over $9000 to $9500 before GDAX halted trading. At the time of writing this description, trading is still halted and Bitcoin has recovered above $17,000.

In this video, I expected to make a recording just talking about the flash crash that Bitcoin experienced down to $14k, but instead was treated to watching these first trading minutes live while recording.

Many people speculate that the Cashening 2.0 might happen as the Bitcoin network is being 'attacked' and there is a coordinated effort to make Bitcoin seem awful surrounding its difficulty adjustment. While this is possible, it wasn't particularly difficult to manipulate Bitcoin Cash's price given the thin order books (low liquidity), offering a great manipulation opportunity by whales regardless of coordination.

Once trading resumes, Bitcoin Cash will likely crash on GDAX to the levels it is trading on other exchanges. While a pump might happen again, there is very low probability of a Cashening. While Bitcoin Cash is currently more useful as a transaction medium (purely in that it has lower transaction fees, not that it is accepted by more businesses), Bitcoin has way more capital inflows from traditional investors in addition to crypto enthusiasts.

I hope you all took advantage of the opportunity to make some quick money. Buffett's quote always holds true - Be greedy when others are fearful and fearful when others are greedy.

On a side note, Bitcoin is becoming a more attractive RELATIVE purchase as its dominance continues to decline below 50%. As such, I have taken this opportunity to increase my position in Bitcoin slightly, shifting some funds from some altcoins I own. Thank you for watching as always.

Note: I will respond to most relevant comments here on Steemit if you were interested in starting a discussion.

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Cryptoinvestor you're the best youtuber on crypto. It took me only 2 min to figure out you have experience in the market and you have more knowledge than most other youtubers combined. If not a secret I would like to know which state do you live? I live in MA.

I originally lived in NY, so that's what you are hearing if that's why you are asking. Thanks for the kind words!

Check this out! CNBC fast money going to show this image tomorrow? To prompt bcash?!?!?! Roger Ver might know people at CNBC?

https://twitter.com/joyrider50/status/943310352363560960

CNBC has featured Roger Ver before and been bullish on Bitcoin Cash. I tend to think it will have a limited and short-lived effect.

Why is the "cashening" improbable? Opinion makers I find credible all agree with you. But why not? I feel that it is very easily possible. I'm not fanatic to either BTC or BCH, just rationalizing over all the moving parts.
This could continue in intervals until faith in BTC is broken. Also BCH might have better marketing in the short term. But it matters now what the newcomers observe in the media...

A couple of reasons:

  1. Bitcoin has the branding which means anytime somebody wants to buy Bitcoin, which is the cryptocurrency everyone has heard of, they will contribute to increasing the value of Bitcoin over Bitcoin Cash

  2. Ethereum vs. Ethereum Classic has illustrated to us that the minority fork has limited probability of taking over

  3. Lightning adoption without SegWit is possible, but less ideal which means Bitcoin Cash will likely stay with on-scale solutions which can be a slippery slope. If you screw up Layer 1, it's difficult to fix - even if Lightning sucks, at the very least you can ignore it by just operating on Layer 1. The point being, once Bitcoin implements off-chain solutions, Bitcoin Cash will likely become less relevant as fees go down.

  4. Bitcoin's primary source of pricing by the market, as I have discussed before, doesn't come from it being a transaction medium - which means that Bitcoin Cash's superiority in this regard (in terms of fees) really shouldn't matter in terms of market cap.

  5. All reference prices for Bitcoin futures currently use 'Bitcoin' which will be difficult to change

  6. Roger Ver is NOT a good face for the cryptocurrency. He has the passion, but he is unable to control his emotions, often can sound way out there, and struggles to be mature in his representation of Bitcoin Cash. To be fair, many faces of Bitcoin struggle to be mature as well, but it is not Bitcoin's burden to convince precious dollars to come over. Ver should be holding himself to a higher standard than the rest which he is struggling to do unfortunately (or fortunately depending on how you look at it).

Very clear thanks for the reply!

It seems to me the more Roger Ver talks and tries to push BCH the more harm it does to BCH. They hate the crypto community seems to have for Roger defiantly does not help with the adoption of BCH.

The problem, though, is that people outside the community are probably who are on the btc cash bandwagon (institutional money and the like,) don't really care what the rest of the fish in the crypto ocean think. Plus, with this on now listed on Coinbase, you'll have a lot of newbies getting on board, not understanding the internal politics involved.
Ultimately, time will tell.

now do u believe that bitcoin cash will be bigger bitcoin?

No, for many reasons.

Do you think DASH is a good buy here since its likely to be listed on Coinbase in the coming year and may experience a similar pop?

No strong opinions on Dash. I wouldn't buy it personally, but that's just me.

Great content. Been following your channel since I got into crypto which has been less than a month. Would you be willing to do a video for beginners to understand how the gdax platform works and what everything means. I'm getting better at understanding it but what exactly does the order book mean, limit, Etc

Yes at some point I plan on doing a video on how to buy crypto and get involved, including a step-by-step guide for GDAX.

Thanks. Looking forward to it.

Great video! This market is a rollercoaster! I've got really worried about a potential crash because the price at this point has nothing to do with adoption of the technology. I've taken my initial investment out and am ready to reinvest if and when the crash occurs.

Thanks! I don't blame you, best of luck with it.

hey thanks for the video, I was wondering what that 8500 BCH bullshit was but I guess trades were frozen. I guess if I had a real question it would be do you predict any major spikes for BTC/ETH/LTC on XMAS, or NYE? it seems like every holiday or solar eclipse or whatever theres a mini pump n dump. Thanks in advance.

Maybe, but I don't see any particular reason for it to do so just because of the holidays aside from discussion like we saw with Thanksgiving weekend. If anything, turn of the years tend not to be the best for Bitcoin.

Do you think Rogers television appearance will affect BCH price in a positive way?

See my response to rambogoham.

Thanks, you make excellent videos.

You should study @haejin Lee! If you haven't already seen his blog, his analysis is helping tons of people!

I'm not big on advanced TA, but he definitely has some interesting charts.

I'd like to hear your thoughts on what you think is the true value of bitcoin at its current state of development.

Have patience - I probably not going to give an exact number, but at some point here I will likely provide an estimate in a future article I'm working on and researching.