Has anyone noticed that we've been getting mostly positive industry news and negative external factors?
The Crypto Industry seems to be strengthening, yet external factors are moving prices down in the short term.
And that is likely good news for those wanting to enter the space.
We have a new asset class that is just getting it's sea legs under it, but we have negative external headlines coming from all sorts of directions that mostly don't affect the underlying fundamentals of the industry.
That is likely creating a very good buying opportunity.
What do I mean exactly?
I mean that we have had tons of positive developments in the space over the past several months but all that is overshadowed by the lack of clear regulations, selling by the Mt. Gox trustee, as well as a few other external events.
Just off the top of my head, we have had new exchanges/apps coming out every couple of weeks that offer cheaper alternatives to current exchanges.
Plus many of these newer ones have proper licenses/registrations/exemptions that perhaps some of the older ones didn't have.
The purchase of Poloniex by Circle was a perfect example of this. That looks to be the first exchange that will be registered with the SEC.
We also have the Circle Invest app and the Robinhood App, as well as a couple others that hope to revolutionize the crypto mobile trading industry while offering fee-free trading.
We are also getting more and better use cases for cryptocurrencies.
Yes Bitcoin was dropped from a couple of its long time retail supporters, but that was only because the transaction fees were unsustainably high. Fees are now down roughly 97% from those highs and retailers are starting to pick it back up as a payment method.
Also...
More crypto hedge funds are popping up every week wanting exposure to the space.
More and more derivatives products are being created every couple of weeks as well, with the newest ones being created in Europe.
We also are getting more and more traditional investment products, related to cryptocurrencies, being offered by Grayscale Investments, similar to the extremely popular GBTC.
We are also slowly but surely getting more clarity on tax issues and regulatory guidance.
Also, every couple of days when I google Bitcoin, I see updates about new merchants accepting bitcoin, bitcoin cash, ethereum, or litecoin as a form of payment.
Use cases truly are increasing.
There is even a "crypto-back" credit card in the works where customers will receive 1% back of their purchases made with the card in the form of bitcoin or ether.
New college classes are being formed every semester focusing on cryptocurrencies, blockchain, and writing code, so our youth is being educated.
Bitcoin etc, have their very own segment on the CNBC Youtube page. Plus Bitcoin is mentioned every single day, usually multiple times per day on their extremely popular Fast Money show.
The underlying technology/potential is also slowly getting better.
Segwit is already being used at several exchanges, and the the Lightning Network is slowly being implemented and tested as well.
I am sure I am leaving many things out, but overall it seems things are progressing nicely, yet prices are off about 70% from their highs, which to me is the perfect set up to be buying into.
Pay attention to the underlying growth that is happening, while the price of the currency is mostly trending downwards.
At some point the strengthening fundamentals will start to drive prices more so than the negative headline of the day.
Stay informed my friends.
*Images courtesy of Pexels.com
Follow me: @jrcornel
That’s exactly want we need , companies and everyone else to accept bitcoin and the other cryptocurrencies
Great summation! Thanks for the info.
How is Robinhood treating you? :)
Just bought my first BTC! So simple I couldn’t believe it. Great App! 👍👍👍
3 thumbs up
Robinhood app also for apple products?
good point! I guess the market just need sometime to digest the crazy bull last year...
It’s true that the price movement has nothing to do with the strengthening fundamentals. It’s almost counterintuitive and is dangerous to your financial health if you have a short term outlook. I do see this as a buying opportunity. I’ll take a few more months of downward action before we get some nice gains. Thanks for the post!
The future is so bright. Wake me up when the darkness ends. I always thought the need to wait until 2020 to realize my crypto dreams. The hope of earlier success has been squashed by this bear market.
End the FUD.
I agree with the others. People keep refreshing their charts and are not reading the news. The lightning network is a huge boost for bitcoin. The mt gox trustee may have been subsided. Yes HF and Goldman support. People are listening to the media too much. Over time the volatility will subside and the price will creep back up. They took leverage (credit cards) out of crypto so that accelerated the down swing. Stay patient everyone.
I agree we have been having loads of good technical news but at present, most people don’t care about technology or the real world problems crypto can solve, they only care about the price. That’s why there are well over a thousand coins, the vast majority without any kind of use case etc. There needs to be a huge consolidation to make crypto viable and very low prices may help that.
Don’t get me wrong, I want high prices as much as anyone who holds crypto but at present there is still far too much speculation and not enough focus on the tech!
Yes I agree, hopefully prices don't have to go much lower before that starts happening.
I think the G-20 meeting starting 19. this month. Will lift the fog. For the big money to flod back in too the CC market. Mostly speculation. It's the internet bobble times X. Mass coindeaths will happen. But the survivors may make you A lot whelthier 😊
I liken the current situation to a wildfire that clears away all of the unhealthy underbrush, but leaves the steady forest in a state to thrive. In other words, the BS crypto projects are being wiped out and market share is being consolidated into the legitimate use cases (Bitcoin being the most legit by a mile, as a store of value).
Agreed, a good time to buy is on the horizon. I am expecting further weakness until the prices approach those of the miner's break-even point ($4-5k Bitcoin).
Should we reach a price point that is on par with production (mining) and the regulatory green-light is given, get your space gear ready! Institutional money will begin accumulating positions, prices will appreciate, and then the melt up is on!
The asset class is so miniscule that even a tiny capital re-shuffle into crypto will have huge profit windfalls.
I read this morning that we are currently at break even mining prices for btc just under $8k, but I haven't verified that yet.
Break even under what conditions? Free electricity and latest mining equipment I assume? Difficulty may start to drop if prices continue to dive although equipment cost is already a sunk cost and if electricity is free then they may as well keep mining!
Good questions. This is from the news release today:
"There are some bullish signs emerging. Bitcoin currently trades at the break-even cost of mining, currently at $8,038, based on a model by Fundstrat’s data scientists Sam Doctor and Ken Xuan. The digital currency bottomed in 2015 when it was at the same multiple relative to mining costs as it is today, and peaked in 2013 at 21 times its mining costs."
https://www.bloomberg.com/news/articles/2018-03-15/bitcoin-bull-tom-lee-sees-more-pain-ahead-before-price-recovery
Agreed @grizgal it is a relatively dynamic/ambiguous metric (mining break-even, that is), but I'd read an estimate that tried to come up with a global average mining price, rather than purely based on US electrical prices. The estimate was in the $4-5k range. Cannot recall the link to provide here, but it seems to coincide with the link @jrcornel provided above citing sub $6k lows in store.
In this entirely nascent, subjective market I will stick to sub $5k bottoms, purely from a psychological standpoint.
Great points but short term I am not nearly as optimistic as you I am afraid. You talk ed a lot about the micro issues, but it is the macro issues that are causing all of the commotion. 1. The way most ICO launched is probably illegal. 2. There is no self-regulation within the crypto community. This will cause authorities to be heavy handed on regulation. 3. There is still way too much price manipulation going on. You will see this not being the case when crypto start moving independently of each other over time. 4. There still is no set of standards for how to conduct business in this space. It is a literal free fro all. Rules change at will and no one is accountable. Read the Fla. indictment for Bitconnect. The authorities do not even have the real names of the perpetrators and the entire crypto community is silent about the entire fiasco even as it is being repeated as I write this. These are all macro issues that will continue to cause fear and volatility over the next 2+ years.
The biggest issues is the coin/token markets. No one anticipated them. They were handled poorly led by promoters who never cared about the industry only making quick money. These guys are masters at raising money fast but then run away and ae on to the nest one. they make it bad for everyone.
Also with the prices jumping around so radically many of these companies will have the financing to conduct their businesses. They are using token sales to do that now but what happens when things stabilize or stay down for a long while? Where will they get additional capital? The traditional funders are staying on the sidelines because they want control.
Think about Steemit for example. If there were 10M active people on this platform the content management costs would be staggering. Facebook pays billions each year just for managing content (storing and delivering I mean). Steemit would be pressed all the time and if the token priced dipped, they would need outside funding and it would also cause lots of rule changes around here. Like every other business crypto need to get its house in order.
Finally I respectfully disagree about use cases. Use cases require scale. No one has tested their tech at scale that I am aware of. This stuff will break all over the place as we say happen with Bitcoin when things start really moving. The truth is the hype is way ahead of the tech right now and that is not a good sign.
I do not want to sound pessimistic, I am actually optimistic, but there are real factors that is impacting the industry and will for some time. In my humble opinion, keep your seat belt on, this is the new way of things for this industry for a while.
Thanks and sorry for the long comments.
I think that's an important nuance. The overall outlook is good, but not if you're only in it for the short term. Given that outlook, an ideal time to invest would be now-ish, after we've seen some stabilization in price (as in, at least not until the Mt. Gox trustee flow has less effect).
Just because it should stabilize eventually doesn't mean you want to buy BTC at $8k.
While I agree on most of your assessments, I think the post has a great point that most internal factors are positive and ahoukd outweigh the external factors happening at this point. Regulation, as long as it is responsible in that it does not hinder innovation, will ultimately be positive as we don’t need bad guys in a free for all. This will bring clarity to the space and open it up to more capital that is available out there. In the US, government agencies are already in place to handle this so it is just a matter of setting the guidelines. Again, it will lead to uncertainty in the short term but will be good over the long term as more internal factors like technology continue to be developed for the best use cases. Small projects will struggle but those that have a brand established will be successful as long as the community continues to support it. For example, Lightning Labs just announced they got funding for the Lightning Network beta deployment. The names of people backing this are huge (Jack Dorsey from Twitter/Square and Charlie Lee from LTC)! The tech will support adoption and growth which will lead it forward in the long term.
Gox trustee is apperantly on halt untill September, so, regarding the amount of bitcoin that he still needs to sell, in all probability, even when the markets go up, around september there will probably be another dip.
@newageinv thanks for your thoughts. I think the challenge in terms of the good outweighing the bad is that none of these crypto companies have a track record. This is the downside of an ICO. You have an idea and without any testing put up an 8 page white paper and raise tens of millions of dollars and then you are trading. This makes for huge volatility on the one hand and a need for the ICOs to constantly hype in order to keep their token prices up. None of them have even the slightest fundamentals to examine and they unlike their blockchain foundations, are quite opaque. In this environment, outside data is the only data people should count on in my opinion. Anything else is simply too risky to bet your money on.
A final point is that I said there is a possibility that many existing cryptos listed illegally. There is a chance that the SEC will either not allow these companies to conduct business in the US going forward (and other places will follow the lead of the US), or they will demand that these companies simply start everything over. How that happens, and who would it apply to? I have no idea but I can tell you that this is the conversation right now.
It is the downside of cryptos being labeled as investments. The US did this because the guidelines for raising money as an investment is well formulated and the parameters are set already. They can take existing laws an simply apply them. And if you know anything about securities laws, you know that they are very strict.
From everything I am reading and hearing regulation proposals will be rigid and firm. Remember these guys have to protect the traditional investment markets. Imagine the uproar from Apple, Microsoft and markets like the Nasdaq and Dow if Dash or Cardano gets a valuation bigger than Amazon while being listed on an unregulated market and these companies were able to raise money completely unregulated and with no real business yet. It would be chaos. I cannot see that ever happening.
As I said, if these crypto leaders are not in rooms right now talking about regulating themselves, they are not as smart as they think they are. They need to weed out the graft, set standards for how both the companies and the marketplaces /exchanges can operate, and bring these to the table. I hope they are because you can believe the other side is doing just that. Thanks.
Yes, market manipulation is huge, but bitcoin support is fantastic, every other stock on the planet wuold have been annihilated by this massive flooding and whales d&b. Community is demostrating to be strong and enthusiast.
In april I am expecting a huge uptrend correction, I mean, maybe during some months maybe we will be on the actual ranges, but when blockchain technology will go massive it will be amazing, and it will be in 2018/19.
Thank for your comments. Yes the support for Bitcoin is really strong (thank God), but part of it right now is that it is so easy to manipulate. Every time it goes up and down lots of people with no interest in the tech or future of it get paid a ton. The markets will not settle down this year or next I am afraid. Too many factors out there and government regulation and weeding out the bad apples and the crap will take through the year and into 2019. Follow the markets, learn the trends and see how you can get paid for now. But a stable business? Two years at least.
The big guys want cheap crypto to buy in ;)
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