Monero prices are rocketing up in anticipation of the upcoming hard fork which will split Monero into a new currency, MoneroV.
Why is the price increasing?
In the space of just one week, Monero prices have increased from $271 to its current price of $365.
This is a common occurrence in the crypto space and happens with most hard forks. This is simply because when a hard fork happens, the amount of coins you have is duplicated and in some cases (such as MoneroV – 10x) the number of coins you have is multiplied.
The creation of a new fork of a cryptocurrency is commonly the cause of the price increasing as many investors and scalpers want to be able to quickly cash in on “free money”
Is it safe?
This is a tricky question as yes, it can be safe, as we saw with Bitcoin Cash, Bitcoin was pumped leading up to the fork and many people cashed out on the airdrop, quickly making extra money.
Timing the inevitable drop of the original currency can be difficult though. Often when people pump extra funds into a currency ahead of a fork, they intend on cashing those funds out immediately after the fork, which causes the price to drop, sometimes dramatically.
Other investors have opted for another strategy, which is to buy in anticipation of a fork and cash out just before the fork, utilizing the inevitable increase in price to turn a profit. This is a very attractive scenario for swing traders as they know they will turn a good profit if they time their purchase and sells well. This can be seen as a type of pump and dump which is seen as an unfavorable technique in trading in any market.
Ultimately any investment in this space is a risk, so please do so with caution and considerable planning.
What are your opinions on hard forks, do you think that the newer technique of pump and dump before the fork is unhealthy for the market?
Comment your thoughts below or via the social media buttons!