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.
Crypterium: The Next Big Thing?
One of the biggest question marks facing the cryptocurrency community is whether mass adoption of decentralized payment systems is feasible. For a project like Crypterium, global adoption of cryptocurrency is only a matter of time.
What is Crypterium?
Crypterium is a digital cryptobank that allows users to pay with cryptocurrency in 42 million stores worldwide. It operates without a physical card, limits or even commission. The underlying goal of this project is to provide an accessible blockchain-based payment system worldwide.
Although Crypterium appears to be similar to other cryptobanks, it has invested heavily in contactless mobile payment technologies. Clearly, the organization believes that plastic cards have no place in the future. Rather than wait for a plastic card to arrive in the mail, users can begin transacting on the platform immediately after installation.
The company’s business model is focused on transactions whereby every merchant pays Crypterium a portion of its settlement. Therefore, users are not required to pay to use the platform.
The underlying mandate of the project is outlined succinctly in an Oct. 6 blog post via Medium:
“We are focused not only on working with the existing crypto community, which now consists of just a few million people, but also with an audience that is still only curious about the crypto-world and is afraid to buy crypto-currencies. We created a system, which will motivate millions of new users to connect with crypto-payments.”
Anyone who is familiar with the ongoing debate over bitcoin forks knows that creating a more transaction-friendly cryptocurrency is top of mind for developers. The key, however, is doing it without jeopardizing the system’s most prized possession: decentralization.
An Introduction to the Cryptoeconomy
Crypterium speaks at great length about the cryptoeconomy in its whitepaper. Citing IDC research, the company says the mobile payments market is expected to reach $3.8 trillion by 2020.
Mobile payments have been expanding rapidly since the introduction of the smartphone. Their proliferation will only accelerate as cryptocurrencies attract more capital and use cases.
The global cryptocurrency market is valued at roughly $210 billion, having gained more than 1,000% this year. Hundreds of initial coin offerings (ICOs) are being launched every week as more startups look to create value for their ecosystem.
At last check, there were roughly 1,200 cryptocurrencies in existence. The growth and widespread adoption of digital tokens is setting the stage for another cashless revolution, only this time in digital payments. Crypterium is betting that this ecosystem will spur instantaneous transfers between cryptocurrency and local fiat currency anywhere in the world via contactless payments. Much of the infrastructure is already in place. The only thing left unanswered is how the crypto market will evolve to facilitate ease of payments.
Crypterium launched its token sale for CRPT ownership Oct. 31. The sale will remain open until Jan. 12 with an option for early termination upon the successful raise of $47 million.
The price of CRPT has been set at 0.0001 BTC with a technical limit of 300 million tokens. Unsold tokens will be destroyed.
Token holders will be able to use their CRPT units as gas to obtain monthly rewards from all user transactions.
TechCrunch co-founder Keith Teare has described Crypterium as “the next big thing.” We may have more insight into this bold proclamation once the crowdraise ends early next year.
Disclaimer: The writer owns bitcoin and other cryptocurrency. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.
Stocks to buy for the short-term – September 05
The S&P 500 has bounced back sharply from its support levels of 2420 and is close to making new lifetime highs. The index is in a strong uptrend and has maintained its higher high and higher low formation. Therefore, we want to buy a few stocks with momentum, which are likely to offer us a good risk to reward ratio.
- The S&P continues to be in an uptrend and will gain further if it breaks out to new lifetime highs
- We want to capitalize on the momentum in the markets
- Buy stocks with a strong momentum in their favor with reliable chart patterns
- Buy BIIB
- Buy CRY
- Buy TD
- Buy BGNE
However, please keep the allocation size small because of the uncertainty about the market’s reaction following the North Korean nuclear test over the weekend. All these positions are speculative in nature, therefore, respect the stop losses and trail profits higher, as and when the stock moves in your favor. Please don’t take the trades if the S&P 500 falls more than 1% today.
Biogen Inc. – (NASDAQ: BIIB), Buy 321, SL 300, Target 376
BIIB had been in a strong uptrend from 2010 to March 2015. During that period, the stock rose from $40 to $442, a gain of more than 1000%. Since then, the stock has been in a correction, which ended just above the 61.8% Fibonacci retracement levels. Thereafter, the stock went into a consolidative phase for about a year.
Last week, the stock broke out of the range, which shows that the bulls have overpowered the bears in the near term and the stock is likely to resume its uptrend once again. Let’s determine its entry, stop loss and target levels from the daily chart.
BIIB has closed above the upper end of the range for two days in a row. Therefore, we expect it to now rally towards its target objective of $376. We can buy the stock at the current levels and keep a stop loss of $300, initially. We have kept a close stop loss because we don’t want to stick with the stock if it again falls back into the range. Please trail the stop higher once the stock moves in your favor. The stock has a good risk to reward ratio and is also backed by favorable news and strong results.
CryoLife – (NYSE: CRY), Buy 21.5, SL 18.5, Target 26
CRY had been stuck below the $16 levels for almost 14 years, before breaking out in August of last year. However, it could not sustain the highs and dropped back to $14 levels in April of this year. Nevertheless, since then, the stock staged a sharp comeback and had been hovering between the $18 to $20 levels for the past few weeks. Last week, the stock staged a sharp breakout above the $20 levels and is likely to rally higher, with no major resistance in sight. What are the critical levels to watch on it?
The stock has formed an inverse head and shoulders pattern, which is a bullish formation and it has a pattern target of $26. The stock can be purchased at the current levels and on any pullback towards the $20.2 levels. The stop loss can be kept at $18.5 levels, which is just below the lows formed on August 24. The risk is $3, whereas the minimum profit objective is $4.5 on each share.
Toronto-Dominion Bank – (NYSE: TD), Buy 54.5, SL 51, Target 61
TD has been in an uptrend since 2002 with major corrections in 2009 and 2015. The stock had been finding it difficult to breakout of $53.5 levels since 2014. Subsequently, the stock ended up forming a cup and handle pattern on the weekly charts. Last week, the stock broke out of the formation and has turned bullish. The long-term pattern target for the stock is $74. However, let’s check the short-term targets and entry point from the daily chart.
The stock gapped up on August 31 and broke out of the bullish cup and handle formation. It continued its journey northwards on Friday also. In the short-term, the stock is likely to rally to $61 levels. We can buy the stock at the current levels and keep a stop loss at $51, just below the moving averages. We risk $3.5 whereas our profit objective is $6 for every share.
Beigene – (NASDAQ: BGNE), Buy 75, SL 65, Target 95
BGNE had been trading in a range for most of last year. It gradually started moving higher in 2017 and spurted in June and July of this year. The stock went from under $40 to about $80 levels within six weeks. Since then, the stock had a shallow correction, which ended just above the 38.2% Fibonacci retracement levels. This shows the strength in the stock. If the stock can breakout to new lifetime highs, it can rally to $105 levels. However, we want to only capture the short-term momentum in the stock.
The stock had been stuck in a small range for the past few days, unable to cross above $72 levels. However, on Friday, the stock rallied sharply and broke out of the overhead resistance. It is now likely to move towards $80, which has been a major resistance twice in the past.
A breakout above $80 should see the stock gather momentum and surge ahead. Therefore, we want to take a preemptive trade with 50% allocation size at the current levels and buy the remaining once the stock breaks out of $80. The stop loss can be kept at $65. Our target objective is $95 in the short-term. Therefore, the risk is a total of $10 for a profit of $20 when purchased at $75. For the buy taken at $80, the risk is $15 for a profit of $15.
2019: Which ICOs Are Now Thriving Firms? (Part 1 of 3)
Writing about ICOs and cryptocurrencies, due to the fast-paced nature of the markets and how we can see literally insane levels of growth or depression, it’s easy to become solely focused on short-term strategies and probabilities.
Just like every romantic encounter can produce a child who grows into a billionaire or a janitor, every ICO is creating a company or product which must now navigate its way into the world. In this three-part series, the author makes predictions on a few ICOs he believes will stand the test of time.
Often during this series, you will notice that the author is an active investor or participant in the thing he is writing about. We hope you keep this in mind when reviewing all forward-looking statements from the author, who is not a registered financial advisor nor wishes you to strictly follow his advice instead of your own intuition.
Looking at the SONM charts this morning, the author was surprised to learn it was trading at just about 8 cents each. Had to pick up a few, but not so many that he is locked into a position, or potentially misses out on cheaper buys in coming turbulence. Since purchase, price has risen about .0001 Eth, and it’s hard to see where it will go from here. Price is not the reason the author is mostly interested in SONM, however, at least not while it is in Alpha stage. The author thinks that long-term, SONM tokens will have an extremely high value for industry players that require them. Their model threatens the likes of Amazon AWS, Digital Ocean, and even Google Cloud Compute. As the author wrote in his initial analysis of SONM:
These corporations are able to offer affordable rates through scaling. But what if the scale was market-driven, infinitely expandable and downsizable, and could be contributed to by most devices in the world? And what if you, the daily user, could sell your unused computing resources to a massive decentralized network in order to offset your broadband and other costs, or even to profit? That’s the idea behind the Supercomputer Organized by Network Mining (SONM): a global, decentralized, incentivized cluster of computing power, and one of a few promising plays in the distributed computing market.
The goal is to have around 100,000 SNM out of the total 444 billion. The author is still in the acquisition phase, so there is a profit-taking order placed at .001 Eth per SONM. In the event of a spike, a 400% return is acceptable, and the author can simply retain 25% of the tokens for later use. Because on the long scale, this is the sort of thing that will actually have value. SNM tokens may be trading cheaply now, but so were NEO shares not long ago.
Before SONM will start to snowball in value, it will need to launch an actual product. Their alpha launch is said to be a bit messy, requiring a Docker installation for miners, which is unusual but probably worth the excess hassle.
Disclaimer: This author has invested a small amount in SNM tokens. Do your own due diligence on any information received from Hacked.com.
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