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BNP Paribas Says Bitcoin Will Suffer Because It Lacks Central Bank Support

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International financier BNP Paribas doesn’t believe in bitcoin’s future because the cryptocurrency lacks a lender of last resort. In its view, this will limit the widespread adoption of the digital payment universe.

Bitcoin’s Future Is Limited

According to The Telegraph, BNP Paribas believes bitcoin’s future is being stymied by a lack of central bank support. This not only carries significant risks, but will actually limit the growth of cryptocurrency outside the core investment community.

“The potential threat to central bank seigniorage, worries about money laundering, financial stability, tax avoidance and crime, all make regulatory moves elsewhere possible,” the French bank said in a note.

Although BNP acknowledged that bitcoin is probably in a bubble, it said this alone “does not mean that the bubble will burst soon.” Bitcoin has added more than 1,000% over the past year, with prices recently crossing $8,000.

The bank believes that one of the major risks facing cryptocurrencies is their inability to cope with a major financial crisis. Unlike the 2008 financial crisis, a meltdown in the crypto sphere won’t bring central bank regulators to its aid.

We’ve Heard It All Before

BNP isn’t the first major financial institution to criticize bitcoin, and likely won’t be the last. Of course, its criticism must be understood within the context of the modern day central banking system.

In other words, financial institutions rely on the fiat currency-generating machine known as the central bank to shore up liquidity when times get tough. This is what it means to be a ‘lender of last resort’. (They also receive government funding to stay afloat once they become over-leveraged. It pays to be called ‘too big to fail’.)

In a decentralized system like bitcoin, there are no banks to hold your currency. This essentially removes the notion of a bank run, rending central bank intervention less relevant.

Of course, central banking is just another system of control. It represents another layer of government that many view as unnecessary. Any system that dissolves centralized power risks being met with stern resistance from the old boys club. It therefore comes as no surprise that the heavy hitters have come out in full force against bitcoin. (Of course, they are more than happy to use the technology bitcoiners have developed over the years.)

Then again, it also bears reminding that the mainstream has become much more accepting of cryptocurrency than ever before. We are on the cusp of bitcoin futures and probably ETFs sometime in the near future. Investment banks such as Goldman Sachs are also moving closer to trading bitcoin, but are still evaluating the risks and potentials of the alternative asset class.

Bitcoin’s emergence has spawned at least a 1,000 other cryptocurrencies. Although most market participants agree that most will fail, they also sense a major paradigm shift underway in the global financial system. Combined, the market is valued at nearly $240 billion.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 696 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Tron Price Analysis: Justin Sun Makes Offer to EOS and ETH Developers; TRX/USD Outperforms

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  • TRX has been outperforming its peers in the session on Friday, within a sea of red.
  • Tron founder Justin Sun makes an offer to EOS and ETH developers.

The Tron price is witnessing decent bounce to the upside in comparison to many of its peers. Gains of some 3% in the session on Friday have been observed at the time of writing. A big thanks to a couple of supporting confluences. Firstly, TRX/USD during its most recent cooling period has formed a bullish flag pattern formation. This began to take shape after the price saw a chunky rally from 27-29th November, having jumped around 48%. During the sell-off that hit the market in the latter part Thursday’s session to open of Friday, fortunately the falling price was caught. The lower tracking trend line of the mentioned flag came to the rescue.

Elsewhere, the demand area that began to take shape after the recent bottom seen on 25th November has certainly held its ground. The buying interest looks strong from $0.01350 down to the low at 0.11150 – the 25th November low. Unlike several of Tron’s peers, these recent formed support bottom areas have been breached. As a result, the market as a whole saw an extension to the downside, with moves that were somewhat exacerbated due to the critical near-term support levels being pierced. This allowed the bears to come in and capitalize.

Justin Sun’s Offer to EOS and ETH Developers

Tron’s founder Justin Sun has recently announced via Twitter that there will be a fund created by the foundation. The goal of this will be rescue any potential developers of EOS and Ethereum if they move their Decentralized Applications to the Tron Network. Justin Sun tweeted, “#TRON will build a fund to rescue #ETH and #EOS developers from the collapse of their platform as long as those developers migrate their dapps to #TRON”. This is clearly a move from the Tron founder to further improve on his platform’s image. He is not shy from these types of social media marketing tactics.

Technical Review – TRX/USD

TRX/USD daily chart

The bulls will be eyeing a firm convincing breakout from this bullish flag pattern formation. Upper resistance is seen at $0.01450, the above trend line. A push above here will invite another retest of the prior acting demand zone, which is now resistance. This can be seen tracking from $0.01600 to $0.01800. Such as technical development should spark decent upside momentum, with bulls gunning back towards $0.03000. A supply area is seen just ahead of this, tracking from $0.02600 to $0.02800. TRX/USD last traded up at these heights in October.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 84 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Cryptocurrencies

Why Investors Should Pay Attention to Gnosis

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Ever since I started learning about the blockchain industry, I’ve been constantly astounded at the various use cases being applied to it. One such use case is with Gnosis, a prediction market company with high aspirations.

Gnosis Prediction Market

A prediction market is basically a mechanism for turning user predictions into an aggregate forecast of future events. The idea is that based on the “wisdom of crowds” we can use information from the collective to be smarter and more accurate than any information from any one individual.

And the prediction markets create incentive for people to be correct about their predictions. This allows for users to bet on certain events occurring. The higher a likelihood of an event occurring, the greater that events’ “token worth” would be. And as something becomes more or less likely, the price of the token increases or decreases.

In a prediction market, the array of possibilities are split so that each of them has an assigned probability, and they all add up to 100%. Therefore, as an event becomes more and more certain, it rises in price. This would create a profitable opportunity for anyone who bets on a low probability event in the case it ends up being correct.

The Mechanics of the Market

There are a few implications of this market set up. First, efficient markets matter. If news is well-known and distributed equally to everyone, new info that creates certainty regarding a prediction will zero out all of the non-winning options. If not, it is possible that someone will buy a token thinking it’s a longshot or a bargain, when it is really, truly disqualified.

Additionally, there are two ways to make money trading on the market. You can take profit along the way by purchasing a token and later selling it once the probability of said event has gone up, or you can wait until receiving a payout for being correct.

GNO tokens are tradeable on the open market and have monetary value, but are not to be confused with Olympia tokens. These tokens are used inside the app to make bets. GNO only represents the payout for making the right choice with your Olympia tokens.

Gnosis tokens (GNO) are ERC20 tokens, with 10 million created and sold during ICO. No new tokens have been created since. The current architecture supports the Gnosis prediction market, but more prediction market applications will eventually be feasible. Some other features that are relevant to investors are the multi-sig wallet and robust developer tools that will help to create a sustained community around it.

The Buying Opportunity

GNO is currently trading around $12.66 USD, or 0.00317 BTC, and is ranked 191 in terms of market capitalization. The recent trend has been gradually upward, with the weak BTC continuing to depreciate against it. The coin is available on Bittrex, Poloniex, and Kraken, and could serve as a great short-term bet based on its strength versus Bitcoin. Whether you want to be involved in it long-term depends upon your belief in the prediction market use case and its ability to maintain strength against BTC.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.2 stars on average, based on 52 rated posts




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Stellar ­­­Price Analysis: After Brutal Selling the Bulls are Back, For Now

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  • XLM/USD bulls have managed to stage a rebound with the daily closure on 27th.
  • Should this latest foundation of a recovery been capitalized on, then there is potential for XLM/USD to fly.

Recovery Mode On

XLM/USD daily chart

XLM/USD has over the last two sessions managed to regather some bullish momentum. This came after five consecutive sessions in the red, as part of a larger bearish trend. The price within the mentioned period had dropped a chunky 35%. Even more notable is that XLM/USD has dropped over 50% since 12th November. Given the daily closure on 27th November, it appears that sellers have run exhausted, for now. The price managed to close in the green, for the first time in five days. Therefore, a recovery mode could be well under way, but there are some big barriers.

It could be foreseen that the selling pressure was losing steam, given XLM/USD attempting to form a bottom over the past three days. The buyers had been strongly defending the $0.1350 area, between the 25th to 27th November. This was demonstrating signs of exhaustion, given the intensity of downside that has been observed of late. It isn’t too surprising to see a change in trend now, after observing the RSI via the daily. The RSI had run firmly into negative territory, dropping to around 24, before the bounce coming into play on 27th November.

XLM/USD bottom area

Upside Targets

Taking into consideration the recent bottoming, bulls must now focus on the barriers that lie ahead. Firstly, there was a demand area that had been serving as firm support for XLM/USD. This had been in play from June up to November. The market bears had forced a breakout given the high intensity at the time of the move lower. Due to the shear length of time the zone had been active, it wouldn’t be surprising to see this acting as a new stubborn area of resistance. This will be the first necessary barrier to break down. It is seen tracking from $0.1700-$0.1900 range.

Looking further north, should a breakout of the mentioned area be seen, expect a larger wave of buyers return to XLM/USD. As a result, the bulls will likely breakdown the $0.2000 area. This is where the lower trend line of the breached pennant pattern is seen to be tracking. Furthermore, such moves could then see the price flying back towards the $0.3000 mark. There isn’t much in the way of barriers until this point. XLM/USD last traded in proximity to this level on 12th November, just before the bears kicked in.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 84 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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