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Is Crypto a Bubble?
A lot of people are wondering if the whole crypto phenomenon is nothing else but a bubble. We’d say it would be a fair question except that these people asking it have been skeptics from the very beginning, so they’re not really assessing the market on its own right and performance but just singing the same old song.
We believe that the current market conditions do not justify the notion of crypto as a bubble and we’ll explain to you why.
First, we start by reviewing a bit of market dynamics. Every market, every asset, every currency develops in cycles that repeat over time. Each cycle is comprised of four different stages called “phases”:
- Stealth
- Awareness
- Mania
- Blowoff
It all starts at Stealth. A new stock, asset, or cryptocurrency hits the market. Nobody knows anything about it so nobody pays any attention to it or tries to buy it. The price is slow and it stays very much the same until the market becomes aware it’s there. Hence the name for the following phase.
As the market realizes this new thing exists it starts to pay attention to it and to buy it, so it takes off, the price rises steadily until it faces its first sell-off. The price drops a little. Then something else happens. The media pays, at last, attention to this hypothetical coin or stock and it creates enthusiasm in the market. We’re in the mania phase.
Enthusiasm turns into greed and delusion and the price skyrockets until it reaches a maximum price. And when you are on top, the only way to go is down, which is what happens next. Denial shows its ugly mug. Nobody can believe that an asset that went so far up could possibly go back down, but it does.
That is the blow-off phase. It bounces back briefly (in a phenomenon known as “the bull trap”) until it’s “normal” again. Then, fear takes over the market, it capitulates and the price goes down in a freefall. It reaches a minimal price and then it bounces back to stabilize.
It becomes priced at the average value it had all over the journey, and it stays there until some new development starts the whole circus once again. One of the most basic rules in technical analysis is this: sooner or later every market will go back to its average price.
The process we describe in the last paragraph is very well known among expert investors. It happened to Amazon, Microsoft, or any other company you’d care to mention. It happened to the crypto market as a whole, and it’s also happened to each digital asset within the market individually. In other words: this is the way of things. This is how prices behave always, and it will happen again.
As things stand right now, we’re in the blow-off phase, after last December’s mania phase. We are headed to hit rock bottom. And that’s not a bad thing because that’s when the market will bounce back and reach the average level it’s had for the last ten years. And then, history will repeat itself.
So why is crypto not a bubble? Because so far it’s behaved in the exact same way in which all traditional markets have for centuries since the first stock markets came along in the 17th century. When bubbles burst, industries disappear. Crypto, as an industry, is not only not disappearing but it’s grown more this year than any other year since its inception.
So don’t let the haters bring you down. They can talk about bubbles popping until the cows come home. But you and I know better.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
Image Courtesy of Pixabay.
Hong Kong, Hong Kong, 25th January, 2021, // ChainWire //
Xeno Holdings Limited (xno.live ), a blockchain solutions company based in Hong Kong, has announced the listing of its ecosystem utility token XNO on the ‘Bithumb Korea’ cryptocurrency exchange on January 21st 2021.
Xeno NFT Hub (market.xno.live ), developed by Xeno Holdings, enables easy minting of digital items into NFTs while also providing a marketplace where anyone can securely trade NFTs.
The Xeno NFT Hub project team includes former members of the technology project Yosemite X based in San Francisco and professionals such as Gabby Dizon who is a games industry expert and NFT space influencer based in Southeast Asia.
NFT(Non-Fungible Token) technology has recently gained huge focus in the blockchain arena and beyond, making waves in the online gaming sector, the art world, and the digital copyrights industry in recent years. The strongest feature of NFTs is that “NFTs are unique digital assets that cannot be replaced or forged”. Unlike fungible tokens such as Bitcoin or Ether, NFTs are not interchangeable for other tokens of the same type but instead each NFT has a unique value and specific information that cannot be replaced. This fact makes NFTs the perfect solution to record and prove ownership of digital and real-world items like works of art, game items, limited-edition collectibles, and more. One of the ways to have a successful…
2020 has been an incredible year for crypto as investors have generated windfall profits and crypto projects have seen their businesses gain the spotlight they’ve been looking for. While Bitcoin has received most of the attention after major institutional investors announced they were accumulating the increasingly scarce asset, many altcoins have also seen their fair share of glory. When looking at all the big winners of the past year, the first project that probably comes to mind is Chainlink, having appreciated by more than 550% YTD and now valued at over $4.5 billion. But, the actual biggest winner of the year is HEX with a YTD return of over 5,000%.
I mention both of the above projects as they have each taken slightly different paths to achieve greatness. Chainlink has devoted resources toward building a fundamentally sound business with many strategic partnerships while HEX has spent vast sums of money on marketing and promotion. Both approaches are valid, but one thing is certain, it is absolutely imperative for crypto projects to let the crypto community know what makes them special. Of course, one of the reasons that makes crypto so valuable is the powerful blockchain technology that most projects are utilizing.
Cryptocurrency vs. Blockchain Technology
It’s important to make a distinction between blockchain technology and cryptocurrency. Although they are often used interchangeably, they are different. Blockchain technology and crypto were both created after the 2008 financial crisis, but cryptocurrency…
Altcoins
XENO starts VIP NFT trading service and collaborates with contemporary artist Hiro Yamagata
Hong Kong, Hong Kong, 24th December, 2020, // ChainWire //
The XENO NFT Hub (https://xno.live) will provide a crypto-powered digital items and collectables trading platform allowing users to create, buy, and sell NFTs. Additionally it will support auction based listings, governance and voting mechanisms, trade history tracking, user rating and other advanced features.
As a first step towards its fully comprehensive service, XENO NFT Hub launched a recent VIP service to select users and early adopters in December 2020 with plans for a full Public Beta to open in June 2021.
“NFTs are extremely flexible in their usage, from digital event tickets to artwork, and while NFTs have a very wide spectrum of uses and categories XENO will initially focus its partnership efforts and its own item curation on three primary areas: gaming, sports & entertainment, and collectibles.”, said XENO NFT Hub president Anthony Di Franco.
He also added “This does not mean we will prohibit other types of NFTs from our ecosystem However, it simply means that XENO’s efforts as a company will be targeted into these verticals initially as a cohesive business approach.”
Development and Procurement Lead, Gabby Dizon explained, “Despite our initial focus, we found ourselves with a unique opportunity to host some of the works of Mr. Hiro Yamagata. We are collaborating with Japanese artist Hiro Yamagata to enshrine some of his artwork into NFTs.”
Mr. Yamagata has…
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