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.

Altcoins

KaratGold Proves Its Business Model By Providing Official Documents

Published

on

READ LATER - DOWNLOAD THIS POST AS PDF

There has been a lot of renewed enthusiasm in the cryptocurrency market thanks mainly to Bitcoin’s strong move about 10,000.  Although Bitcoin continues to show its dominance, the altcoin market has yet to benefit from that rally.  A few of the largest altcoins remain popular but the rest of the market continues to lag behind.  In 2018, there was a lot of talk regarding a possible altcoin apocalypse where only the strong would survive.  That prediction appears to be playing out as expected.  Going forward, only the best projects that have a real world need will survive.  Crypto traders will have to spend a lot of their time doing proper research in order to find the best opportunities, just like in all financial markets.  One promising project that appears to have the makings of a future winner is KaratGold Coin.

KaratGold Background

KaratGold Coin is a cryptocurrency developed by the reputable German company Karatbars International, which maintains a leading position in the market of small gold items and investments. The project is part of a larger ecosystem, which involves several blockchain solutions that can be used for transactions, communication, investing and other tasks. During the past few weeks, however, the KaratGold ecosystem has been a target of unsavory scam allegations.  

Karatbars International and GSB Gold Standard Banking Corporation…

Continue Reading

Altcoins

ICTE May Bring About Sweeping Changes for Cryptocurrency Exchanges

Published

on

READ LATER - DOWNLOAD THIS POST AS PDF

Cryptocurrency has taken the world by storm during the last few years. An entirely new financial market was created almost overnight which has captured the imagination of all its participants. Cryptocurrency is even starting to attract institutional money from investment banks, hedge funds, and other proprietary trading firms. Despite the rapid growth, traders remain extremely frustrated by having to deal with the fragmented nature of centralized crypto exchanges.

A Change is Needed

When cryptocurrency first began, there weren’t many participants and the trading volume was relatively insignificant. But, over time, that has radically changed. Some tokens now have a capitalization in the billions and are being traded 24-7 by institutions all over the world. Despite the volume, significant problems exist with the current way that exchanges work. Some of those problems include the following:

  • Constant fear of hackers
  • Exchange manipulation
  • Fragmented liquidity
  • Risk of identity theft

One of the biggest issues regarding centralized exchanges is the risk of being hacked. These hack stories seem to always be circulating around the internet. While experienced traders may have the tools to avoid becoming a victim, potential new traders have zero interest in dealing with this. And it’s not just the small exchanges that are at risk. Even large exchanges, such as Mt. Gox and Binance, are subject to being hacked.

Another huge risk is having to deal with…

Continue Reading

Altcoins

SonicX and Dash Could Challenge Facebook’s Libra for Global Payments Market Share

Published

on

SonicX
READ LATER - DOWNLOAD THIS POST AS PDF

When Satoshi Nakamoto unveiled Bitcoin to the world, the dream was always for Bitcoin to serve as a new universal currency.  It would be free from the bureaucracy of governments.  And free from the tyranny of the old-world financial cartels.  Although the dream hasn’t yet materialized, it comes closer and closer with each passing day.

One of the biggest roadblocks for Bitcoin has been scalability.  At a speed of approximately 7 transactions per second, Bitcoin lags behind other cryptocurrencies like Ripple and global payment processors like Visa.  Many expect the lightning network to have a positive impact on Bitcoin’s TPS but until that comes to fruition, mass adoption will likely need another significant development.

Libra Currency Announcement

One development that could help pave the way toward mass adoption is the launch of the Libra currency.  Libra is expected to go live during the first half of 2020 according to Facebook’s June announcement.  According to Facebook, Libra will make sending money online cheaper and faster.  It will also have a hand in improving access to financial services, especially for the unbanked.  Given Facebook’s global reach, including many third world countries, providing financial access to the unbanked could provide a huge spark to global economies.  Additionally, it could provide the growth spark that cryptocurrency needs.

Facebook’s most popular messenger, WhatsApp, has approximately 1.5 billion monthly users.  This application is…

Continue Reading

Elite