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China and the Next Cryptocurrency Bull Market 

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Cryptocurrency experts from mainland China believe we are on the cusp of another bull market for digital currency, and it could be nationals from their own country who help drive the “fifth wave” of the market uptrend.

Chinese Investors Will Drive Next Crypto Bull Market, Experts Predict

In a recent interview with Tencent Technology, Sun Zeyu of Genesis Capital said cryptocurrencies are poised to continue higher in the fourth quarter as investors shake off the sentiment-laden collapses of the first six months of 2018.

Gensis Capital is a Hong Kong-based investment firm specializing in growth-stage internet companies.

Gao Kangdi of Metropolis VC told Chinese media that “the scale of the fifth wave of the crypto bull market may be far beyond our imagination.”

What these industry voices have in common is the belief that China will play a major role in the next bull market in spite of a nation-wide ban on the trading and mining of digital assets. They cite massive flows of capital into the blockchain and crypto ecosystem already underway in places like Singapore.

The tiny city-state is now home to thousands of foundations established by Chinese nationals. This has been corroborated by Chen Xianhui, a local agent helping Chinese nationals set up foundations in Singapore. According to Chen, most of these thousand-plus foundations are token investments funds.

Setting up a foundation in Singapore costs only 10,000 RMB ($1,561 U.S.) and takes just 15 days.

Singapore has emerged as one of the more favorable destinations for initial coin offerings (ICOs) and other market players. The Monetary Authority of Singapore (MAS) last month proposed changes to its current regulatory regime that will make it easier for blockchain-related exchanges to set up shop in the country.

Instability in Traditional Markets

China’s crypto analysts believe global financial instability and the growing trend toward risk aversion could play into the hands of digital currencies. Bitcoin is often posited as a non-correlated asset, which means it moves independently of the broader financial market. Although some observers noted a small correlation between bitcoin and stocks earlier this year, this was largely due to the influx of new crypto traders to the market.

While it’s far too premature to call for a bear market in global equities, a sharp rise in bond yields and growing instability in emerging-market currencies have been the source of significant tumult in recent months. The next critical test for equities will be the gradual winding down of crisis-era monetary policies.

The European Central Bank (ECB) announced Thursday it would put an end to its record bond-buying program this year. Meanwhile, the U.S. Federal Reserve is planning to raise interest rates two more times in 2018.

Bitcoin’s status as a safe haven has been contested by those who argue that virtual currencies have no intrinsic value. However, analysts at Goldman Sachs believe the opposite is true as assets like bitcoin continue to grow and mature.

In particular, Goldman Sachs analyst Zach Pandl has argued that bitcoin will follow a similar trajectory as gold in the long run as a low-return, hedge-like asset.

“We should stress that, as money, cryptocurrencies should have low expected returns in the long run, despite their high returns recently,” he wrote back in January. “Digital currencies should be thought of as low/zero return or hedge-like assets, akin to gold or certain other metals.”

Charles Thorngren, CEO of Noble Alternative Investments, believes bitcoin is also attracting a new type of investor – namely, equity investors who are looking for new options.

In an interview with Forbes, Thorngren said the following:

“The base of bitcoin has changed, in fact it has evolved, to a wider base of investors. People who have only invested in equities are now looking for options as the rumblings in the stock and bond market increase.

This new investor helps to establish a stronger Bitcoin market and adds legitimacy to the Cryptocurrencies as a whole.”

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 502 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Peter Schiff Tells Joe Rogan Bitcoin Price Will Hit $1,000

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“They think ‘oh, there’s twenty-one million Bitcoins’, and they think that that means they’re scarce. Well they’re not scarce, there’s so many other currencies out there, and it’s only scarce because… it’s coded to be scarce. Gold is scarce because it really is scarce.”

So said investment broker and financial commentator Peter Schiff on July 17th’s episode #1145 of the Joe Rogan Experience. Schiff fully believes that Bitcoin will drop below $1,000 in the near future, at which point it will disintegrate entirely. Funnily enough, Bitcoin’s recent surge began the same day that Schiff conducted the interview.

“There’s nothing that any other cryptocurrency can’t do that Bitcoin is doing… it doesn’t have any actual value. There’s lots of things I can do with gold that shows it has value…”

Lack of Real Value

Schiff went on to list the myriad of industrial, mechanical, medical and personal uses for gold which give it a real-world value – a value which he says Bitcoin lacks.

“All you can do with it is give it to somebody else. That’s its whole purpose is to give it to somebody else.”

At one point in the interview Rogan reminds Peter of the comments he made earlier regarding the state of the dollar economy, and questions why a crypto-based economy couldn’t be feasible.

Schiff, ever the proponent of small-government, pointed out that it would certainly be possible for the government to issue a digital currency in much the same way that they currently issue paper fiat currency, and that such a move would eventually tighten the government’s grip on the whole economy. Whereas before you could receive a $50 from your neighbour for some yard work and not have anyone know, now all of a sudden it would be tracked.

Fatalistic Predictions

It may seem like Schiff dodged the question by pushing everything towards the government angle, but his answer actually revealed his deeper thoughts on the issue. It’s clear from listening to Schiff speak that he doesn’t even question whether governmental regulators will get their paws on crypto – he naturally assumes it to be the case. He goes back to emphasize crypto’s lack of inherent value, saying:

“I don’t think any of these currencies can ever be stable because there’s no value to stable them. There’s no value to store. The only cryptocurrencies that would work are cryptocurrencies that are backed by a real commodity, like gold.”

What followed was an advert for his own gold-backed value transfer platform, Gold Money.

Coming away from the interview, one gets the impression that Peter is tied to a very traditional ethos regarding what qualifies as an effective currency, and may end up surprised by what’s to come.

With that said, I’m sure everyone reading this would agree that he has a point – after all, people don’t really use crypto as currency at the moment. At least not yet. But a quick glance at the crypto headlines reveals several prominent coins opening up crypto-fiat ATM’s, while online marketplaces are popping up where people can make purchases using crypto just as though they were on eBay or Amazon.

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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4.4 stars on average, based on 25 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Crypto Update: Bitcoin Holds $7350 as Altcoins Show Weakness

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It has been another two-faced session so far in the cryptocurrency segment, as Bitcoin’s strength was in stark contrast with the widespread weakness among altcoins. Besides BTC only Dash is slightly in the green among the top 20 coins, and most of the majors are back in their previous trading ranges after the failed break-out, with still only Bitcoin sporting a short-term buy signal according to our trend model.

The mixed, but dominantly still bearish short-term picture means that traders should still be cautious with new positions, as, despite Bitcoin’s ongoing rally, a test of the June lows is still likely with regards to most of the majors, and new lows are also possible in the coming weeks.

For now, the trading ranges that developed after the June lows are still intact, and the previously negatively diverging coins should still be closely monitored for signs of weakness. On the contrary, should a distinct bullish leadership emerge, a trend change would be more likely, but for now, the technical evidence suggests that the segment-wide downtrend is still intact.

BTC/USD, 4-Hour Chart Analysis

Bitcoin avoided a breakdown below its break-out levels yesterday despite the widespread altcoin weakness and it managed to recover above the $7350 support/resistance level, keeping the bullish move intact. That said, the coin failed to trigger any form of follow-through among the majors, and that makes the break-out suspicious. Further support is at the line-in-the-sand $7000 level, at $6750, and $6500, while primary resistance is ahead at $7650.

Weak Bounce in Altcoins Following the Failed Break-Out

ETH/USD, 4-Hour Chart Analysis

No altcoins triggered a short-term buy signal and most of the currencies experienced a failed breakout, but today the segment stabilized and for now, the June lows are safe. Ethereum continues to be relatively weak from a short-term perspective, as the coin settled down near the $475 level, failing to rally back towards $500.

A move the lower end of the range is likely now, with primary support found at $450, with other levels at $420, $400, $380, and $360, and with further resistance ahead between $555 and $575.

DASH/USD, 4-Hour Chart Analysis

Thanks to its scarce liquidity, Dash turned very volatile during yesterday’s wild session, but despite the spikes on several exchanges, the coin remained in a similar technical setup as Litecoin, NEO, and Monero, the other relatively weak coins. These coins failed to recover above the structural breakdown levels, and remained on a long-term sell signal, despite Bitcoin’s encouraging rally. Dash should durably recover above $265 to trigger a short-term buy signal, but a move back to $215 seems more likely now.

XRP/USDT, 4-Hour Chart Analysis

Ripple is also among the weaker coins today and it failed to stay above the $0.49 resistance level, despite the intraday rally. Now XRP is still above the key long-term level which coincides with June low, but a test of that zone is likely in the coming weeks, as the short-term setup is still bearish. Further resistance is ahead at $0.54 and at $0.575, while primary support is now found at $0.45.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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 296 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Bitcoin Price and Seasonality: The Coming Rally? 

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A confluence of technical and fundamental indicators has sparked a big rally in the price of bitcoin this week. The cryptocurrency has found support at $7,400 and, after a short breather, appears poised to test $8,000 in relatively short order.

While the debate over bitcoin’s short-term outlook continues, a historical price analysis reveals that the summer sizzle is nothing new. In fact, the months of July and August tend to exhibit strongly bullish patterns going back six years.

Bitcoin’s Hot Summers

The adage “sell in May and walk away” aptly describes trading patterns of traditional markets such as stocks but appears to go against the grain of bitcoin’s price patterns. Historically, bitcoin has generated large returns in the summer months. Going back to 2012, the only major outlier was 2014 when bitcoin rallied in July but fell in August.

While bitcoin has rallied over the past 48 hours, its gains for the month of July have been modest in comparison to previous years. A rosy August outlook suggests prices could be poised for a bigger breakout in the near term.

Although past performance is no guarantee of future success, seasonality plays a vital role in our understanding of the financial markets. In fact, there is an entire literature devoted to understanding how seasonal influences affect market prices.

Bitcoin: Starting Slow and Finishing Strong

Market researchers have also identified price patterns at different points of the year, with the “January effect” and “Santa Claus rally” forming a critical backbone to our understanding of seasonality.

Unlike stocks, which typically rise in January, bitcoin usually struggles out of the gate. Going back six years, the bitcoin price has declined in January in the following years: 2012, 2014, 2015, 2016 and 2018. Given the relatively small sample size, it’s not entirely clear why bitcoin struggles to start the year. However, the most recent January downturn was not unexpected given the previous month’s massive peak.

Although bitcoin often starts the year in a defensive position, the price has historically rallied in December. To get there, we usually contend with another bumpy month in the form of September.

Against this backdrop, the worst months for bitcoin tend to be January, May and September. So far this year, January and May have been difficult months for the cryptocurrency. It remains to be seen whether history will repeat itself in the coming months.

Bitcoin Price Levels

After a brief dip, the bitcoin price has held relatively steady on Thursday, with values hovering well north of $7,400. Trading volumes are a healthy $5.6 billion, well above the minimum threshold that usually accompanies a major rally attempt.

Bitcoin continues to trade near 40-day highs. Following the successful defense of $7,200, the bulls could be in position to extend the rally toward $8,000 – a level that has eluded BTC/USD for the better part of two months.

According to Barry Silbert, founder of the Digital Currency Group (DCG), the bitcoin price may have finally bottomed as institutional traders look to stake their position in the market.

In a recent interview with CNBC, Silbert said, “…the bears just kind of ran out of energy,” noting that bitcoin has managed to overcome overwhelming FUD.

“When the chair of the Fed says negative things about bitcoin, and Howard Marks says negative things about bitcoin, and Ken Griffin says negative things about bitcoin, and bitcoin doesn’t move, I think that’s a bullish sign,” he said.

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 502 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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