This week sees the advent of the second fork in Bitcoin’s history with the Bitcoin Gold fork taking place as expected on October 25. The promise of free currency has prompted traders to stock up on Bitcoin while dumping altcoins, this practice saw Bitcoin break through the $6000 barrier and reach all time high prices. What happens next is still unknown, with a number of scenarios all possible to play out in the aftermath of the fork.

Scenario 1: The Bitcoin price continues to rise

The last month has seen Bitcoin reach all time high prices of over $6000 as well as reach its highest ever market cap valuation at just over $100B. This activity has generated a lot of attention with various aspects of the media reporting on these trends. This has helped attracted a large number of new investors and while more experienced crypto traders are flexible with their investments, new entrants to the sector will continue to focus solely on Bitcoin and pump more cash in that direction. As a result, we can expect the price of Bitcoin to continue to rise after the fork and actually find new all times highs. At the time of the Bitcoin Cash fork on August 1, Bitcoin ran up from a price of around $2800 on July 31 all the way to around $4400 on August 15 before experiencing a significant pull back.

Scenario 2: The Bitcoin price drops

The lure of a free payout prompted a significant number of traders to leave behind their altcoin investments for Bitcoin. Some of these investors will return to their favored altcoins once they have secured some Bitcoin Gold and as a result, we can expect the price of Bitcoin to fall immediately after October 25. There is also the possibility that traders who overextended themselves by pumping extra fiat into Bitcoin will exit completely by transferring their Bitcoin and Bitcoin Gold reserves back into fiat currencies. During the Bitcoin Cash fork, Bitcoin experienced a minor fall in price, which lasted for about 3 days. Bitcoin traded at a price of around $2850 on August 1, which fell to around $2700 on August 3. However, these drops were marginal and the price went onto rocket afterwards.

Scenario 3: The Bitcoin price stays consistent

The third Bitcoin hard fork (SegWit2x) planned for November creates a new level of uncertainty regarding investor psychology. As investors were motivated by the prospects of gaining Bitcoin Gold, we have to expect their motivations will remain same regarding the possible SegWit2x payout. However, the main questions revolve around exactly how investors will seek to benefit. Some will simply maintain their positions until after the SegWit2x fork, while others will move away from Bitcoin temporarily before returning in time for the fork. Additionally, as there is a level of uncertainty regarding Bitcoin Gold, well-informed traders will look to exchange their Bitcoin Gold for Bitcoin almost immediately. This will help to stabilize the price of Bitcoin and stave off the pressure felt by traders to cash out back into fiat or to transfer their Bitcoin holdings into altcoins.