Hedging against Bitcoin

Hedging is how you safeguard yourselves from high level of uncertainties in the financial markets.

For people who own Bitcoin and were lured in with the mad rush that followed in the months of April and May, the months of July and August will be the greatest shocker for you. Crypomarkets are bleeding and reeling in blood since the last fortnight due to potential scaling debate of the block size on the Bitcoin blockchain and Ethereum finding a few takers since the downhill from $400 to $220 (at the moment of writing). Bitcoin is navigating under political uncertainty – and the chain might split into two as you might have heard in the news. Here’s what the timeline looks like:

The hard fork means the blockchain will split into two parts. One with the Bitcoin and the another with Bitcoin ABC (working title, it might not even have the word Bitcoin). That means that inflation becomes 2X as the money supply increases and the value decrease by more than or equal to 2x. If you own a Bitcoin right now, all you need to be aware of is that your wallet runs a BIP148 node as a signal which will save your Bitcoins, otherwise you would need to find them on the chain in the case of split.

The chances of uncertainty around the existence of Bitcoin in its current form is more than 90%. Bitcoin Wiser forecasts a further dip in the price of Bitcoin, most probably hovering around $1800-$2000. The Indian exchanges will not reflect the international prices and will still hover around INR1,65,000 – 1,70,000 hence we strongly recommend to not buy any from them till August ends.

This is the first big trigger from Bitcoin Wiser to split your crypto portfolio in the months of July and August so as to hedge against Bitcoin in case it fails to remain as the numero uno cryptocurrency in the world:

  1. Hold BTC as is in the wallets that support BIP148. If you are in panic mode then cash half of it in fiat and the rest to be converted to alternate cryptocurrencies:
    1. Ethereum Classic
    2. Dash
    3. Dogecoin
    4. Iconomi
    5. Factom
  2. Hold the above alternate currencies till the end of year before converting it into Bitcoins till the scaling debate ends basis the timeline mentioned in the flowchart attached above.

Note: Bitcoin Wiser recommends you to do full research for your own crypto portfolio. The above article is a mere educational reference and should not be taken as financial advise. Please be responsible with your hard owned money, specially after demonetization and GST drama.

 

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