If you have been up to date with the happenings in the crypto space, you might already have heard about the hype surrounding Monero and its imminent fork. Well, the privacy-centric crypto coin has seen a spike in its price that has made cryptocurrency enthusiasts excited, as others prepare to jump in on the Monero train. Currently, a single Monero token is changing hands at about $360 with a market capitalization of over $5.8 billion.
The Monero V Fork
The developments with Monero and its spiking price are certainly not a new phenomenon in the crypto space. The hard fork on Monero’s blockchain network will see to the emergence of the Monero V token, set to take place on March 14th. As a result of the free tokens that are set to be distributed to holders of the Monero token at a ratio of 1:10, a frenzy has been set off in the crypto space with crypto enthusiasts trying to get their hands on some Monero tokens prior to the hard fork, in order to profit from the free token distribution.
However, given the nature and speed of events in the crypto space, most investors have been wary, trying to find out whether its already too late to invest in the 9th biggest cryptocurrency by market capitalization.
What Is the Purpose of the Fork Anyway?
At the moment, Monero is lauded as the most popular privacy-centric cryptocurrency and Monero V will only be bringing about a couple of differences. Monero V claims to be a scalable version of Monero with a “limited supply of coins”.
However, hard forks are mostly unpredictable and even as investors flock to purchase Monero tokens, historical trends from hard forks such as Bitcoin Cash from Bitcoin illustrate a couple of risks that investors should beware of.
The Risk Involved With Hard Forks
Although most of the time investors can easily multiply their funds by investing in a cryptocurrency right before a hard fork, then cashing out with their newly distributed coins, there are some instances that have completely gone south. A good example is Ethereum Classic’s airdop of the Callisto tokens. On the 20th of February, ETC saw a spike in price trading at $0.44 in response to speculative investing prior to the airdrop. However the ETC price collapsed almost by 50 percent as a result of cashing out by savvy investors.
As a result, anyone who invested in Ethereum Classic just for the free Callisto tokens might not necessarily have made a profit. Cryptocurrency investing is currently highly volatile and full of risks, and investors are recommended to conduct their own due diligence.
Would you invest in Monero to make possible gains during the fork? Share your thoughts with us in the comments section below.