[2017-10-13] Are people buying because of the opportunity to get "free money"?

[gokayc]

Bitcoin prices broke through $5,800 last night, extending their recent gains and reaching a fresh, all-time high.

The digital currency rose to as much as $5,856.10, according to the CoinDesk Bitcoin Price Index (BPI).

At the time of report, the digital currency's price had retreated somewhat, trading at roughly $5,625, additional BPI figures show.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Sustained Rally

Bitcoin prices have been on a tear this year, consistently rising to record levels.

"Momentum creates news," said Charles Hayter, co-founder and CEO of leveraged digital currency platform CryptoCompare.

This news draws new investors, and "the price keeps running."

The digital currency hit a new record earlier yesterday, breaking through $5,300.

After reaching its latest high of more than $5,800, Bitcoin was up roughly 500% year-to-date, after starting out 2017 below $1,000.

Regulatory Developments

Bitcoin has been enjoying an upward march in spite of a string of regulatory developments, including government crackdowns in China and news that the U.S. Securities and Exchange Commission will consider certain Initial Coin Offerings to be security sales.

Criticism

In addition to encountering these potential challenges, Bitcoin has also come under fire from high-profile financial professionals including JPMorgan Chase CEO Jamie Dimon and Bridgewater Associates founder Ray Dalio.

In spite of these difficulties, Bitcoin prices have continued to climb.

Potential Hard Fork

When explaining why the digital currency has kept rising in spite of these headwinds, several analysts pointed to the upcoming hard fork scheduled for October 25, when Bitcoin Gold is supposed to come into existence.

In executing this hard fork and creating another protocol, Bitcoin Gold's supporters aim to create a version of Bitcoin that is more decentralized than the original protocol, according to CoinDesk.

'Free Money'

The prospect of receiving "free money" as a result of this fork is driving investors to Bitcoin, said Tim Enneking, managing director of Crypto Asset Management.

Gavin Yeung, founder and CEO of digital asset management firm Cryptomover, offered similar sentiment.

"Investors are seeing the upcoming fork as a dividend and buying opportunity," he stated.

Hayter also spoke to this dividend, stating that it is motivating buyers to "pile in" before the split date.

https://www.forbes.com/sites/cbovaird/2017/10/13/bitcoin-surpasses-5800-reaching-new-all-time-high/#5a7cfc807fa5

[hatshepsut93]

So far neither of upcoming forks look like "free money". Exchanges seem to not give Bitcoin Gold much attention in their statements - a sign that the value of this coin might turn out to be really small. SegWit2x still unclear with their replay protection, and without replay protection exchanges might have a hard time listing and doing operations with it. Also it can be risky to buy BTC with the only goal of getting forks, because if BTC will correct now, the combined price might still be lower. It's certainly possible that some traders buying BTC to get forks, but I'm not sure if it's the main reason behind the recent surge in price.

[richardsNY]

It could be, but I doubt it if we look at how much the price has gone up. Nothing in the world justifies any person to blindly buy himself extra coins just because of an insignificant fork. Main point of importance is that you don't know how the value of such a coin will develop -- it might very well be that it will end up being worth just 0.01-0.02 BTC at most, which is nothing special. It would only justify buying yourself more coins if you know that Bitcoin Gold will more or less hover around 0.1 BTC for at least a short period of time.

[zakalwe]

It's not just about the "free money" aka Bitcoin Gold but there were some positive announcements lately. I heard that few governments gave green light for Bitcoin and announced that they are not afraid of the blockchain technology, they support it and they are preparing laws. Also the mainstream media went crazy when the new all time high was reached. Even my local weekly newspaper put Bitcoin on the front page and they are political newspaper.

[Kprawn]

Yes, we are buying bitcoins now to prepare for the Bitcoin Gold fork. Why not? We saw what happened with Bitcoin Cash and

we made a ton of money selling those FREE coins to the people who wanted to support that lost cause. We will now rinse and

repeat the same thing with Bitcoin Gold. The plan is to get FREE coins and to sell them after the fork and then to buy more

Legacy Bitcoins. 

[btcton]

I have not been following Bitcoin Gold at all, but the "free money" sentiment around it seems to be rather accurate, at least when compared to previous failed forks such as Bitcoin Cash which seems to have crashed somewhat significantly. I doubt that once this becomes more common people will be able to abuse this as much, however. Once it is understood that a fork has to serve a good long term purpose that could not be fixed with a soft fork or update to the main blockchain, all the dissent will fade away and any hype over new forks will probably die down. It is the same kind of life flow that you could have seen with the very early crypto-currency craze in which everyone wanted an altcoin for whatever random reason.

[greeklogos]

That is interesting how people afraided the previouse fork and were selling their bitcoins "while it's not too late" and the price was dropping. And now everybody are selling their altcoins to buy bitcoin to get free coins like it was with bitcoin cash 

[1Referee]

Main point of importance is that you don't know how the value of such a coin will develop -- it might very well be that it will end up being worth just 0.01-0.02 BTC at most, which is nothing special.

Basically that. I personally would never ever buy coins just for the purpose of ending up with more garbage split coins. If people proceed to increase their positions at even higher levels, then they are delusional, and greedy. I even consider this to be the same as gambling -> you're basically betting on the split coins to have a higher value making your action worthwhile.

It would only justify buying yourself more coins if you know that Bitcoin Gold will more or less hover around 0.1 BTC for at least a short period of time.

That only goes up for people basing their actions on insider information. If people (those who do not have insider information) are really buying themselves into Bitcoin because of the Bitcoin Gold chain split, and thus the price is going up as result of this buying, then it is what I mentioned before, and that's gambling. It's nothing more than empty speculation, that may result in you increasing your holdings, or end up in you rushing to sell the extra coins you bought just because of this event.

[Siren]

Well it looks like this is the case. People have already learn their lesson, specially during the 1st of August, where most of us didn't get some free money because we opt to get our money out of the exchanges and some have sold their coins just few days before the split. And since there is a another looming split on 25th of October and another chance of free coins, then people are putting their money on bitcoin in hope of getting a 1:1 coins in case of a split. And this opportunity will likely give them the chance to dump bitcoin gold right away and buy more bitcoins or altcoins. So I'm optimistic that this sequence push the price of bitcoin on what it is today.