Saturday, June 5, 2021
The End of the Bitcion Bull? Where did all my Doge go? What price trends and current events suggest for the month of June of 2021 (by the author)
Ok so if you have been on planet Earth this past year and your somehow interested or invested in cryptocurrency and blockchain industries, this article will definitely have some interest for you.
This month saw Bitcoin "correction" in the market. Which is trade talk for understating that an otherwise sound investment lost a reasonable amount of its value for logical and somewhat predictable reasons.
Tell that to the millions of small investors whose holdings went down by 50% overall.
So with that said what's happened this last month, and what's going to happen?
Bitcoin Bull or Bear?
Even this author, with my sources, research and networks has struggled to really make sense out of what is happening with Bitcoin. By understanding this, we can better predict what changes will take place in the wider market.
So lets take the last six weeks in brief:
The first point to understand is that Bitcoin has been trending down for the past two months. Starting in April 14 Bitcoin began to a downward trend, from its highest of 63.6K to around 49k (its currently about 40k).
Then it rebounded briefly and erratically back up to around 59k and continued to have substantial volatility at a high level, losing 10% or so and gaining it back until May 9.
What happened on May 9? Enter Mr. Elon Musk, aka the worlds other richest man... who seems to have taken to cryptocurrency as something of a pastime and hobby, as opposed to his more serious exploits such as GOING TO MARS.
In this time he began releasing a series of tweets that ultimately cost investors up to 50% of their Bitcoin holdings!
After his first tweet on May 7, he appeared on SNL as a cohost and made a couple more "questionable" comments (scripted no doubt) about Doge and crypto in general.
This had the immediate effect of Dropping Doge's overall price from its high of .75 cents to at one point .29 cents.
Two of tokens most widely held by young people and new investors, these tokens have yet to regain their momentum, although according to financial indicators the Bitcoin Bull is still "running".
While price projections indicated last week that Bitcoin was still in a Bull Market, this weeks data has since began to dispelled this notion, however as a financial term, the concept of a Bull Market is defined by having at least two consecutive quarters of growth.
Translation: BITCOIN IS STILL GROWING.
This in spite of several "perceived" problems investors have when forecasting markets and speculating about potential trends and high yield investments.
While Bitcoins growth, as well as Doge, my be slower, it will continue to yield substantial dividends to any investor whose in it for the long haul of 90 or more days.
Any strategy of short selling Bitcoin has substantial risks, as an investments growth is fueled by its practical adaptability and usage, which for Bitcoin and Doge, in spite of their popularity, is limited.
In addition to the negative PR by Elon Musk Bitcoin, a market leader and standard, has significant fundamental investment issues:
It has limited adaptability to other purposes in the blockchain economy;
Mining of it is generally costly and to small operations completely unprofitable;
Regulations in the U.S. and in Asia are still pending which put fear into larger institutional investors and venture capitalists;
People's perceptions of this product are varied, with even less knowledge of the technology on which it is built, creating a vacuum in terms of how people expect its price and value to behave, this its volatility easily spooks investors.
There are many other competing and even less volatile, in terms of price, that are available for investors to move into, diverting those funds which would normally be held as Bitcoin.
So with these thoughts in mind, and Bitcoins price remaining below 40K, as well as recent chart projections, we believe that the Bitcion Bull Market is actually over.
While Bitcion will continue to grow, it will be at a slower pace, with more measured increases. So if you into Bitcoin for the long haul, six months to a year or more, then know that it does make sense to get into the market and hold.
If however your looking for a quick turn around or rapid growth, in Bitcion, you may be greatly disappointed.
China and The U.S. Seek To Regulate Binance
Although Bitcoin and its clones are thought to be DECENTRALIZED, a vast majority of the worlds MINING is greatly centralized.
Where? The PRC of course. The production of these digital ledgers and the accounting blocks which drive them called "Tokens" have taken on a magical life of their own, literally making money, almost out of thin air... or so it seems to the confused public and policy makers, still years behind understanding what a digital block, or digital ledger is.
The immediate response, accusations of money laundering, outright bad business, and a host of other financial crimes.
These events have driven Asia's largest crypto conglomerate into hard times as investors (if they are smart) flee for more... predictable and regulated investments.
Research suggests that the while much of what Binance Exchange and Chain produces, will be under hard times for the next weeks going into summer.
The good news is that for speculators this makes a great opportunity for investment, particularly if your horizon is one to two years into the future.
For short term yields, there's definitely a bumpy road ahead;
The perpetual chaos continues with a growing list of lawsuits, both in China and the U.S., with moves by both nations to introduce tougher crypto regulations.
The market output has translated into a huge price drop across the board as investors start moving into markets with greater price and earnings stability. In the crypto world this can happen in a matter of days.
Thus new and undeveloped chains are receiving a new injection of energy and price increase.
Some of the benefactors include a host of altcoins which weren't as badly battered by the recent market volatility such as HNT, Kusama, Polywhale, Polygon and ADA.
The end result is a deflation in the market leaders token price, but not the market value overall.
In other words the money is still IN THE MARKET, just not where some investors think it should be.
Rarely do high yield earners leave crypto for traditional bank accounts IRA's, or other long term "stable" investments as the lack of liquidity in the market acts as a barrier to this. Also there are many options in virtual currency which allows investors to shelter their investments.
Bitcoin Bull v. Bear
After all his publicity Mr. Elon Musk went from Bull to Bear on Bitcoin. This translated in the markets as the beginning of bad times for Bitcoins market price dropping from a high of around 62K to less than 30k at its lowest finally stablizing at around 36.5K,
The bad news? This may not be the end of price woes for the crypto giant. There are several fundamental problems in the Bitcoin playbook which limit its growth over the short term. As this becomes more apparent in the market, particularly from institutional investors, it translates into a slow price drop.
While the summer increase awaits, Bitcoin may still experience some new highs this year, but for now a 35.6K price tag would be considered cheap, and a worthy investment.
Why? The price momentum of Bitcoin is still, in spite of its woes, on an upward projectory. So while it may not grow quite as fast, it will grow, and , most likely will regain its former 59K value by the end of the year.
Before that however, expect some bumps in the road.
The Ethereum Problem
Traffic, traffic, traffic. What good is all the computing and verification power in the world if you can't access it when you need to. In a market where hours are like days, in terms of price volatility, getting trades executed ASAP is imperative.
The Ethereum network however remains clogged, and at capacity, with trades in limbo for hours if not days. Combined with high fees and transaction costs crypto investors are seeking new and lesser known platforms which offer the same service at less the cost, and with quicker execution.
Another small but persistent concern for investors is that people still don't understand exactly what Ethereum is! A simple perusal of the white paper will leave a person mystified, however the simple version is that Ethereum is ideally a WORLD COMPUTER.
Its design was not intended to develop a token price of 50K one day , because Ethereum is the substance that powers its network. Therefore if the price were to increase substantially, so too would the cost of using Etherum platforms and its gas (the internal fees that power the cost of transactions within the application).
Translation: we don't want the price of Ethereum to go up exponentially, even if you own the token, strictly for investment purposes. Even that person may one day use other on or off chain applications which will then be much more expensive as a consequence of uncontrolled price growth.
That's a double edged sword for some of us.
Decentralized Finance
A growing trend which has pushed the development of these currencies are various platforms which allow you to lend or invest your tokens.
Platforms such as Pancake, Bunny, Venus, Alpaca, and around 1000 others give investors huge returns on the liquidity they provide to the application by means of lending pools. Allowing deposits as small as the token price, these yield farms are powered by smart contracts which allow investors to receive their tokens directly back into their accounts at the end of the lending terms.
Savvy investors are cashing out their Bitcion and Ethereum and steering their capital toward these "yield farms" as ways of creating passive income. There are however risks, which anyone looking to do this needs to understand before committing substantial sums.
We will go into yield farms further in this blog as they merit substantial time and detailed discussion.
Sunday, May 23, 2021
Friday, May 21, 2021
Ways To Beat Inflation This Year: Dogecoin, Bitcoin, and the Cryptomarket (reference link)
Here are a few ways to beat inflation this year, while increasing capital gains overall:
https://www.youtube.com/watch?v=bmJfwghJwQE
Wednesday, May 19, 2021
5 Reasons Why Bitcoin and Cryptocurrency Markets Have Been Crashing (May 19, 2021)
Today witnessed a third consecutive day of losses in the crypto markets.
Some reasons include:
Bitcoin is up 286% for the year, but has seen nothing but losses for the last month, but in recent days this has increased crescendoing with record losses today... but why?
Bitcoin doesn't operate in a vacuum. Placed upon the substructure of the wider stock market Bitcoin has not actually changed in its value or content, but rather suffered at the mercy of a wider market adjustment.
Sometimes crypto enthusiasts forget that this market is subject to various changes within both the industries, service, manufacture and fosile fuel industries. Therefore it isn't a place for tourists, but rather a hazardous endeavor as all investing can be.
To the point the first and biggest reason for the recent dip has been a perfect storm (of sorts) in the financial world consisting of state governments, decentralized communities, and regulations and even famous entrepreneurs which just can't seem to get their message across "clearly" and without abmiguity.
The SNP, Dow, and NASDAQ all lost this years gains in just a few days, due to various wider changes in the market.
This is out of the scope of this article, however merits further study and certainly affects the overall crypto market which is built upon the traditional markets.
The crypto markets were further impacted by other more blockchain focused yet still unrelated events such as:
- Elon Musk's bungled SNL appearance hugely impacted the market sending Bitcoin and Dogen into their first troubles.
- Then the US governments announcements of investigations into Binance and Binance related companies, followed China's announcements that it will also be investigating Binance, and introducing new rules to prevent certain types of trading such as banning the use of crypto for the use of payment. Turkey also followed suit sending Bitcoin down further.
- Followed by the constant rant of right wing, and online anti crypto 'gloom and doomers' who generally hate cryptocurrency, decentralized finance, and the communities that support them.
- That investors would flee to calmer waters is something that goes without saying, but the better question we should ask should be:
Are cryptocurrency markets still healthy and sound investments?
I believe that the answer is absolutely YES. While we may not know exactly where the bottom of this current dip will end, we do know that it won't last long, whether or not Bitcoin is accepted as payment by Elon Musk.