Ever since the arrival of bitcoin cash forked coins have been in style.
While BCH has succeeded in gaining traction, not only on exchanges, but also IRL the stragglers have struggled.
There is very little evidence that the likes of Bitcoin Gold and Bitcoin Diamond are used for anything other than sheer speculation. That speculation can see forked cryptocurrencies pumped up to insane heights, as the events of this month evince.
The bitcoin community at large is decidedly split when it comes to crypto forks. Some see these forked coins, which are issued to existing bitcoin holders (or hodlers), as an egalitarian distribution strategy that creates an instantaneous user base and sprawling community. Others aren’t so certain, questioning both the intents behind these projects as well as the lack of infrastructure support seen.
Bitcoin Diamond was distributed at a BTC rate of Ten-To-One when it was released in November. Within a matter of only days, the forked cryptocurrency had settled into a price bracket around the $30 dollar mark with major exchanges such as Bittrex refusing to even touch it. BitCoin diamond seemed destined to remain languishing.
In a matter of minutes, however, the cryptocurrency multiplied forty times on exchange Kucoin, sending it over $800 dollars. The movement prompted Kucoin to issue the following warning to its customers (right):
Starting on the evening of Friday January 12th, crypto-traders went long on many of the BTC forks that have been created in recent months. Not surprisingly, the action seemed to stem from the Asian markets before impacting on all worldwide exchanges that supported the coin(s).
For anyone who FOMO’s (Fear Of Missing Out) hard and piles into these green candles there is a risk of failure.
BitCoin Diamond’s meteoric rise was evidently an orchestrated Pump & Dump.
Many daytraders, unaware of the pump and dump will have had sell orders set for Bitcoin Diamond.
The majority of forked cryptocurrencies have very few real real life use cases, but the recent events may entice traders at large to set and forget their coins from now hereon out.