How Crypto Markets Changed In Less Than 100 Days
At the beginning of this year I started a 30 days writing challenge. Basically, I wrote every day about a topic I wasn't very comfortable with, having 2 goals in mind:
- to learn more about that topic
- to maintain (and enhance) my writing discipline
Thing went so great, that I decided to continue writing about this topic every day even well after the challenge ended.
The topic: daily crypto market evolution.
So, during the last 90 days or so, I wrote each and every day about the prices of the top 10 crypto assets and very short analysis on the 30 minutes, 1 hour and 1 day charts of STEEM and SBD.
Probably the biggest benefit of this exercise was the insight that I got into the markets. It's easy to get carried away by FUD, by over-optimistic news, or even by your own biases and expectations. But having a daily, constant and cold exposure to this topic kinda puts the whole thing on a different perspective. You get to see trends or direction with more clarity. You start to understand a bit more than just the dry technical analysis or the irrational jumps generated by news (either positive, or negative).
And my overall conclusion after almost 100 days is that we live in a completely different market than the one at the end of 2017.
Here's how:
1. The Hype Is Over
After Bitcoin being on the front page of almost every newspaper in the world, it seems we reached a certain level of saturation. I mean, it's been on Ellen DeGeneres show, it's been mocked by the Ultra Spiritual dude, it's been downplayed and then revered by Jamie Dimon and so on and so forth.
It was bound that at some point the audience will get fed up with it. So, not only Bitcoin news are less viral than before, but the overall interest of the mainstream crowd vanished a bit. It's not that cool to be on this wagon anymore. Especially with those highs and lows. Too risky.
2. Institutional Money Are Creating Friction
The impact of Bitcoin futures, although highly praised at the time and considered a confirmation, or a graduation of Bitcoin, who's finally allowed to sit at the big guys table, kinda backfired. Not only it didn't bring the expected increase in price, but it literally helped the price go down.
Because, you know, financial instruments, like futures and options, are way more complicated than simple "buy and sell" exchanges. And the more complicated a financial instrument is, the easier you'll get fucked by it. That's exactly what's happening with Bitcoin now: with the arrival of the futures people finally got a way to short Bitcoin and that creates a lot of friction in the market. It doesn't necessarily bring the price down, but it adds a second layer of activity, one that slows down the price a lot, no matter its direction: the pumps, as well as the dumps, are way slower these days.
3. Bitcoin And Blockchain Finally Diverged
In the early days of the hysterical hype of the last year, the main message was that Bitcoin and "Blockchain" is the same thing. It took a few months to the mainstream crowd to learn the Bitcoin is just an application of the blockchain technology, and not even necessarily the best one.
More and more applications of the blockchain appear every day, and that has a strange effect on Bitcoin (and, subsequently, to the most visible alts). Now, that Bitcoin is not the only application of the blockchain, but, since blockchain itself is a very cool thing, the interest in the financial speculation of Bitcoin, as an asset, is depleting.
Investors are looking at the technology more than at the token.
4. ICOs Forced Regulations
The ICO frenzy ended quite bad, if we really look at it. The speed and the magnitude of the phenomenon were simply too big not to be finally toned down by governments all over the world. So, my take is that because ICOs were such a viral phenomenon, we're now seeing regulations in major countries, like China and US.
There are quite a few ICOs still going on and the practice of tokenizing a startup and getting investment by selling those tokens at the beginning of the business cycle is certainly not dead, but I'm seeing a lot less pizzazz around it. As a result, the whole trading activity across the entire crypto spectrum is less vivid than before.
5. Scams Are Keeping People Away
BitConnect popped, eventually. I mean, it was just a question of time. If you would have just some basic math skills you couldn't accept that return scheme without rising both eyebrows.
But since this time we were seeing something way more "techy" and with a lot more validation than just plain, brain-washing scams like OneCoin, the impact was bigger. A lot of people are now scared of entering in a "crypto based scheme", because they don't have time to learn and they're afraid they'll step right into the next BitConnect.
While the popping of big time scams was a good thing, the ripples are a bit too deep now and we'll need at least 6-9 months of a scam-free crypto scene for the sentiment to bounce back.
There are a few other reasons why I think the markets are bit duller than 3 months ago, but, all in all, I think those 5 above are the most important.
We're entering a "sleeping" stage, in which jumps may not be as high as before, volumes significantly lower and the sentiment predominantly bearish. I don't think we're in a bearish market, there's still a lot of unfinished business between $11k and $17k (if we talk only abut Bitcoin) so there's still room for a new bull trend.
But I don't expect it to be as fast or as consistent as the last one in November-December last year.
As always, time will tell.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
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fijate @dragosroua , un experto en psicología del aprendizaje en Venezuela llamado Alberto machado, creo una teoría llamada "La revolución de la inteligencia", varios países asumieron sus teorías en especial China y otros países asiáticos.
Su idea era estimular la inteligencia desde el Útero...con musica, hablando y de mil maneras para que el bebe ya fuera asumiendo los estímulos externos.
Sostenía él en sus teorías que si una persona leía una hora a tres horas diarias sobre un tema, al año, esa persona tendía 365 horas o 1000 horas sobre ese tema. En tres años tendrá 3.000 horas sobre algún tema de su agrado y de su iteres eso lo haría en corto tiempo en un gran experto, o erudito.
Lo que estimulas con esta estrategia de estudio y de preparación individual en un camino. Nos obligas con tu ejemplo a estudiar, a escribir. Analizar y divulgar tus resultados. De allí el análisis y confrontación de otros estudios.
Al respecto del Blockchain, que abordas en tu escrito de hoy, te digo que apenas tengo dos meses incorporado a mi léxico a mi aprendizaje. Así como el Bitcoin lo conozco dese hace más tiempo te aseguro que conozco menos que el mercado crypto.
Cuando China en la antesala de su congreso comunista anunció que dejaría de asistir al mercado blockchaim me dije aqui esta pasando algo. extrañamente ya los especialistas del mundo asiático habían estructurado la estrategia más perniciosa para el blockcaim minar el Bitcoim hasta mundos inesperados y desconocidos, eso lo llevo como muchos señalan a la estratosfera que corrompió a los más simples de los mortales capitalistas...
Todos enloquecieron y los chinos y los principales inversores sacaron sus inversiones y además desfalacarona a millones de inocentes que pensaron que era una respuesta de esa economía al alza.
Como en la economía analogica podemos predecir cuantas semillas de arroz o trigo podemos sembrar en cuantos centímetros de tierra y con el uso de las supercomputadoras vamos a conseguir en sus algoritmos que esta economía real es limitada que el espacio físico y el tiempo no soportan sino lo que la dimensión física requiere. No hay tierra, no hay semillas ilimitadas.
Cuando ves a la economía digital sembrando bit basuras con maquinas para minar, que no es otra cosa que nada pero que al final también es limitado descubres con el uso de la tecnología que no puedes crear bit de manera ilimitada entonces comprende que la economía blockchaim terminara antes otra que quizas pueda ser la cuanticachaim que aunque más veloz y dimensional darás expectativas superiores a la ambición que en definitiva es lo que mueve los mercados.... en la conclusiones del Congreso comunista Chino creo que decidieron nuevamente ver hacia dentro de China quizás eso los haga esperar 10 años al repunte del Bitcoim hasta los 100K.
gracias por compartir ...corre corre...corre.
Gracias, no hacía falta.
Indeed the market has stabilized a bit after the hype got over. Actually I remember that a few months ago I was looking at bitcoin charts and thought that This is crazy! Everything seemed to go on an exponential curve and it was clear that something would come to happen.
Right now the things are going a little more chill and I expect that we will see a natural slow growth in the near future. Anyway, I am happy because this happens because I don't have much money to invest right now so I will slowly accumulate crypto in time over the next few months if I get the opportunity. And yep, if things will go on like they are, we will see more investors coming aboard, even though the crypto field looks scary with the scams and ICOs that pops here and there, but people need to be better educated before making investments :D
Because scams are keeping people away I think it is good that governments are starting to take notice of ICOs. As long as they focus on fighting fraud I welcome it.
While bitcoin is not the best blockchain it still has new incoming tech going to be added. LN has to work or .......
I hated the idea of futures the very first day after reading couple of articles and watching some videos on it. The idea did not allow smooth buying and selling. Time is clearing the air and we'll know more what happened with the market in year 2018. Great post!
Slower pumps and dumps might actually be good in the long-term. The volatility will not be as scary, and ordinary people might start adopting cryptos gradually :)
They are afraid , we are in the crypto revelation banks and governments try to stop it but the can't ....
The crypto economy belong to the people they can not win us
Many people confuse BTC and blockchain with each other. BTC is just a part of the bigger thing called Blockchain tech. BTC has problems like its transactions are not speedy. Also, the transaction fee is very high. Though this fee is temporarily sits below $1 but it will go up again. In the mid Dec, the transaction fee for BTC was around $34.
All those changes are very good in my eyes the marketing is getting very big and the fact there are so many changes just show that it's here to stay
The last point you list is main reason I hear new comers struggling or people who have money will not invest in crypto. There has to be some sort of way to stop the scams if more investments would flow into the crypto market. Just because it is the latest and greatest does not make it the most valuable. You look for example Japan's tech companies. I would not have thought Sony or Toshiba would be struggling as much as they are now against competitors when they were at the cutting edge of electronics. Yet people stop buying their products and went some where else. All be it not a good example to crypto market but what I am trying to get is even if crypto is good with out the security and protection in place the lack of users will mean lack of money.