RE: When to Buy in New Era of Cryptocurrency Regulation
you have no clue what youre talking about. bitcoin will not go below $6000. If your eyes are open you will see that the FUD is getting more and more serious and yet the effect it has on the market is a small fraction of the initial effect. The hodlers are strong and they are right to be. Any institutional investor (with 100 million to invest) who invests in bitcoin between 6000-8000$ has a extremely good chance (~80%) of making billions in the short term (next 3 years) and about a 5% chance of having bought into the world future international currency (20 + years) which would be valued between 5-13.4 TRILLION dollars. These odds are astronomical in comparison to a lottery ticket. No comparison. Your issue is you don't truly understand the technology behind bitcoin and the power that the popularity brings to the techs adaptable nature.
let me ask you something. do you really think that the reason bitcoin jumped up from 9k to 15k in a day because of regular buyers like you and me? NO. That was clearly instiutional investors getting involved. This entire crash is nothing short of market manipulation.
The institutional investors want the weak hands out so they can buy the BOTTOM STACK of bitcoin.
All institutional investors SHOULD and have BEGUN to invest 5% of their investable assets in bitcoin with the intention to hold it for 20+ years.
Most institutional investors won't invest in Bitcoin as it has no intrinsic value at it's core apart from being the first kid on the block. It's also lacking behind in several aspect that would making it a useful currency. The changes are painfully slow due to lack of consensus within the core developers. Proof of work will also be problem as it requires a certain profitability for miners to have an incentive in maintaining the hashrate of the network.
It will still hold value over time but it won't be much different than collectors items such as post stamps (which could be used as currency once upon a time, believe or not). As soon as you can easily exchange or buy other blockchain tokens without going through bitcoin, we're going to see it lose its feathers.
WRONG. They will invest in bitcoin because it has the least inherent risk. Bitcoin has not scaled yet but it is in he process and it certainly has the capacity to scale. The lighting network is expanding everyday and the block sizes will eventually be increased. The bitcoin core developers don't agree but even still, it is way more likely to succeed than the competition because it is the first kid on the block and the most well known. Proof of work will not be a problem for an extremely long time and by then they will have figured something out. Being the first boy on the block is huge. I would say that bitcoin's only competition is ethereum and cardano atm so they are probably something like a 4% and 3% chance of becoming the international currency, respectively. Here is what institutional investors are thinking about bitcoin : https://s3.eu-west-2.amazonaws.com/john-pfeffer/An+Investor%27s+Take+on+Cryptoassets+v6.pdf
Also your argument that bitcoin has it's feathers because it is the largest financial gateway makes no sense. That money comes and goes very quickly. Negligible in comparison to the 3 main reasons people buy bitcoin and keep the money in the network : HODL(the largest percentage of bitcoin has been bought for this reason), quick and consistent profits (panic sellers), and lastly to buy bitcoin only to sell it later and make the weak hands get out. The reason that bitcoin prices falling causes alts to go down isn't because of the pairings. It's because the fact of the matter is this : If you dont believe in bitcoin, if the market doesnt believe in bitcoin, then there is no reason to believe in any other cryptoasset.
Myspace was the first kid on the block. Do you use myspace?
Look im not saying that no crypto currency can take over bitcoin's spot. im saying that being the first kid on the block is a huge advantage . Bitcoin is the decentralized, leaderless standard at the moment despite the fact that it is still centralized. I do believe that other currencies can get ahead. For example, If cardano is able to decentralize and implement a treasury model in a reasonable amount of time then maybe they can get ahead but bitcoin still has the best chance as of now. Then it's ethereum, and then it is cardano.
I honestly think Bitcoin will probably have a relatively high value (maybe more or less then the current value) as it finds a niche with block chain collectors much like post stamps.
Other blockchain platforms are already ahead if you take the monetary value out of the equation. This is my opinion, I look at this from technological and utility point of view.
''Cryptotrading'' doesn't interest me in the less. I actually exchanged most of my Bitcoin fund for other blockchain tokens that solve problems. I think that's where something truly as value or not. Blockchain platforms like Cardano, EOS, Ethereum and etc do strive to solve many problems with the technology and the world at large.
Bitcoin is bogged down with many ''cryptotraders'' or miners who can't look past the $$$. Many of the criteria that held value for Bitcoin are slowly being taken over by other currencies or platform. Anonymity, exchange and storage of value have all been improved by other players in the blockchain ecosystem.
Barron's magazine featured a "value investor" Murray Stahl in Nov 2017 on why he bought bitcoin:
https://www.barrons.com/articles/q-a-why-a-value-investor-decided-to-buy-bitcoin-1511810246
Bill Miller boasted about how half of his fund was in bitcoin.
The pressure of keeping up will push other managers to follow these leaders. The big money will necessarily move into Bitcoin and Ethereum because those have the largest network effects and brand name.
stiglg, I agreed that institutional investors have manipulated the price on more than one occasion, but this does not account for the drop in the entire market. Exchanges like Binance and Bitstamp have recently opened for new customers and Coinbase is struggling to keep up with demand due to the sheer volume of money entering the market. People are frighten and don't know about the technology behind Bitcoin, they only care about the insane profit margin, that is why we are seeing a pull back. Education is key here, and it will strengthen weak hands and will secure blockchain in the future.
The institutional investors are playing around with the emotions of those who have entered the space without knowledge of the underlying technology. The institutional investors are well aware and of the tech as they are currently paying hundreds of thousands of dollars to extremely intelligent people who are explaining it to them. The whales sell in accordance with news so as to mimic AND escalate fears. People have at this point become so irrational that they believe a ponzie scheme with a market cap of 3 billion dollars has artificially inflated the price of a digital commodity that is backed by mathematics by over 200 billion dollars. The fear is working and if people keep this up then the institutional investors will obtain a significant proportion of the bottom stack of bitcoins. In my opinion this is why satoshi disappeared. It is his gamble. If the banked have been unbanked and bitcoin succeeds, he will send them 1 million bitcoin. Even if he is dead, this will be executed. But im a good satoshi guy...who knows!
Hi, I don't believe your premise of the irrationality of investors and your theory that institutional investors are ready to jump in any day now when markets finally bottom. I do not believe that either is the case. You may be right and I may be wrong though. I am willing to admit that. But I will try to explain my thoughts.
Institutional investors are professionals. They do not invest as a hobby. It is their jobs and they know what they are doing. They understand the market cycle. They understand the implications of a parabolic run and then a climatic peak and they can see one a mile away. They get out before the bubble pops when mania besets a market. They mostly got out at on the bull run to $17K in early December. You can see this in the volume of coins traded. We had big volume on that run. Who do you think was selling out? All the news stories were around were saying that bitcoin was going to $100,000 or even a million. Who was not taken in by these crazy stories? The institutional investors. They sold out into the mania that was last December. I do not think that they are coming back for a long time.
Retail investors are acting rationally. We have been exiting since the blow-of top at bitcoin $20K. When a building is on fire, the last people to leave are the ones who get burnt. Some people can afford to hold on, for what may be years, until they get their money back. Most people are not so fortunate. I know that I am not.
Almost everyone in crypto is in here to make money. Let's be honest. But people can see that there are difficulties ahead. The easy money days are gone. That's not the market that we are in now.
What happens to prices if tether and bitfinex fall? They will go off a cliff.
What happens to crypto prices if the stock market crashes and we enter a new recession? They will go off a cliff.
What happens when people realise that 95% of altcoins are garbage? The market will go off a cliff.
What happens (in the short term) if governments seriously regulate crypo? The market will go off a cliff.
But hey, there's the lightning network to look forward to... :)
I believe that bitcoin in 6-8 weeks could be $12K. It's possible. I also believe that in the same time span, bitcoin could be $4K. So that's plus or minus $4K. Am I going to put my money into bitcoin? Of course not. I would get the same odds right now taking my money to the casino and betting it all in red. That's not a rational thing to do with hard saved/hard worked for money. The market understands this position and has done since bitcoin $20K. What is happening is a great unwinding of the market.
But who knows what the future holds. This is just my guess. You might be right. Fingers crossed for you. I hope that it all goes well for you.
institutional investors are professionals. Thats why that guy the guy above linked put 7 million dollars into bitcoin when it was 700$. he also agrees with the other institutional investor that i linked who believes that bitcoin has a chance to be worth all of the world's fiat. Youre right, institutional investors are here to make money and they are educated. They have been educated about bitcoin and so they see it as money. It's value for now, and in my opinion, for decades to come, is volatile. Institutional investors will take advantage of this so that if bitcoin among all the other crypto currencies that are here now or are to come, becomes the world's international currency, they will have obtained each satoshi for as cheap as possible. They have programmed bots to watch the market and have individuals constantly looking at news entering new information as it becomes available. You might want to pretend that this market is 100% like gambling because the odds are low for any of these coins to be THE coin that becomes the world international currency (a coin almost certainly will) but in the short term (<5 years) it is easy to select which coin is most likely to become the world's international currency (<5% chance in the long term no matter which one you think it is).
I appreciate your definite views :) They are interesting to read :)
I would think that greater than 95% of people put money in crypto to make money. We all want to make money. But wanting it doesn't make it happen. Putting savings into the market in the blind hope that the market will rise is gambling. This works in a bull market and people think that they know what they are doing. Buying the dips and holding works when the market is going up. Buying the dips and holding is a terrible strategy when in a bear market. It will kill a portfolio. It will grind it down to nothing. People need to be extremely vigilant and careful in a bear market. They need to protect their capital.
I agree with you that long term bitcoin (or something else) may possibly be even bigger than now. That could be months away or that could be years away. Nobody knows.
Be careful my friend and good luck with whatever strategy you employ
There are 1500+ candidates to become future world currency at this moment alone and many of them already perform better than BTC. Have you counted in the chance that BTC might go down to zero when atomic swaps will remove requirement to use exchanges and BTC as a liquidity pool?
Bitcoin does not act as a liquidity pool for the amount of money you are talking. if you want to sell bitcoin for fiat, do it. if you want to sell bitcoin for alts...go right ahead. bitcoins function as a liquidity pool accounts for a very small portion of why the price is so high. the price is high because there are so many hodlers.
On the other hand, why are there so many hodlers? Because they know there is a demand for bitcoin. And why is there a demand? Is it a good measure for payments, can it store value reliably? No, it isn't and it can't. But it is a good pool of liquidity. And when it wont serve this purpose too then hodlers might as well turn to bagholders.
most of the "hodlers" youre talking about have left the market because well, they are panic sellers. Most bitcoins are hodled because bitcoin has the largest chance of becoming the world's international currency. By the way if you ever see it approaching this you should sell and buy gold.
That's why I diversify crypto investments and don't try to accumulate as much BTC as possible