Connect with us

Blogs

Is Crypto a Bubble?

Published

on

Crypto
READ LATER - DOWNLOAD THIS POST AS PDF

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.

For real-time trade alerts and a daily breakdown of the crypto markets, sign up for Elite membership!

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.

Blogs

What Changes May the Crypto Space Experience in 2019

Published

on

crypto
READ LATER - DOWNLOAD THIS POST AS PDF

After the crypto hype of 2017, a lot of newly-arrived crypto enthusiasts were caught off-guard by the price crash and bear market that took over in 2018. One month after another, investors were waiting for things to change, and for another bull run to take place. Unfortunately, this did not happen in 2018, and while the year’s final days were seemingly stable, the rally everyone wanted to see has failed to arrive.

However, crypto investors remain optimistic, with many of them hoping to see some changes arrive in 2019. There are rather great expectations of this year, especially since the last one failed to deliver. However, many are interested in what exactly is to be expected in this year, which is what we will talk about today.

Bitcoin ETF approval

The US SEC’s decision regarding Bitcoin ETFs was one of the most anticipated events throughout 2018. Sadly, the decision constantly got delayed, and the SEC never actually provided an answer. The last delay has pushed the decision into 2019, and it is now expected to arrive on February 27.

Historically, the SEC was never ready to approve Bitcoin ETF, and many believe that the delays came due to the fact that the market was not ready for then in 2018. This is backed by the fact that the SEC rejected multiple application throughout the year. VanEck and SolidX…

Continue Reading

Blogs

Reasons Why 2019 May Be A Great Year For Crypto

Published

on

crypto
READ LATER - DOWNLOAD THIS POST AS PDF

The new year was always considered to be a time of new beginnings, where people can reflect on the past and learn from their mistakes in order to be better in the future. The same is true for the world of crypto, and investors around the world are hoping for 2019 to be better, more profitable, and to have more success than 2018.

The hope for the future is even more important when we consider all the negative development in 2018. There were numerous high-profile hacking attacks, two market crashes, with a strong bear market in between. Not to mention that some of the biggest projects that may have brightened the year a bit ended up being delayed.

With that in mind, it is understandable why investors are looking forward to the new year and all the potential development that it may bring. In fact, there are several reasons why they should be excited about 2019.

1) Bearish market to loosen its grip

The first reason why 2019 can be a good year digital currencies is that it may finally break free of the bearish grip that has been felt ever since last January. Following the first market crash, the bears settled in, and the prices kept falling for an entire year. The market attempted to shake off the negativity on several occasions, with the biggest one being…

Continue Reading

Blogs

3 Coins with the Largest Potential in 2019

Published

on

coins
READ LATER - DOWNLOAD THIS POST AS PDF

2018 has been a pretty bad year for digital coins, and after the initial market crash that occurred a year ago, everyone was expecting a bull run that will fix things. Obviously, it never arrived, and instead of that, all that crypto market experienced was an entire bearish year and another crash in mid-November.

Now, however, it is a brand new year, and attempts to shake off the bears’ grip can be seen even in these first two weeks. The market is still struggling and mostly losing value, rather than gaining, with most coins being in trouble once more. Still, a lot can happen in a year, and most investors remain optimistic regarding 2019. Here are some of the coins that are believed to have tremendous potential, and to be the hope of this year.

  1. Bitcoin (BTC)

Of course, Bitcoin comes first. This is the first cryptocurrency which is still dominating the market, with no other coin being even close to its market cap or price. BTC is the coin that has reached the most prominent heights, and it also lost the most in the previous year. However, there is still hope, as there are several projects and events scheduled for this year that might turn things around for the number one coin.

One thing that is expected is the approval of Bitcoin ETFs…

Continue Reading

Elite