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Crypto: What Will Drive Prices Higher

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I am a big believer in the future of cryptocurrencies. But it seems the creators of these amazing forces have been getting a free pass.  So long as prices were soaring and speculators were reaping outsized returns, who could complain?  At one point the two biggies, bitcoin and ether appreciated in price more than 7,000%.  But what price are we paying in terms of our security.  Just as important, what are we willing to sacrifice for anonymity?

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In the soul of every human being on the face of the planet there is disdain for government. In some of us it may be only a passing annoyance over a traffic ticket. In others it might verge on boiling anger over POTUS.  Either way, the idea of gaining control over government holds universal appeal.

It’s this notion of having control that draws so many into the family of cryptocurrency believers.  The sovereignty of bitcoin, ether, Litcoin or anyone of the many altcoins is empowering.  Even if all of your transactions are completely legal, the very possibility of being beyond the reach of any tax authority is compelling.

Of course, if your motives are nefarious. . . . well we won’t go into that.

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The Flaws of Government     

Putting your hard earned fiat currencies into crypto may provide an escape from the government that issued that currency, but are you getting better governance?  So far the jury is still deciding.  This is just one opinion but here is what is missing.

Blockchain technology started out as a breakthrough in technology created by highly creative developers but things have moved well beyond that stage. If cryptocurrencies reach the potential they are touted to possess, they have to be treated as a business.  That doesn’t necessitate maximizing profits, but it means being more user centric.   

Speculators want higher prices, users want security, fungibility and ease of use.  These last two are evolving and are low risk aspects.  There is no substitute for security and for all of the anonymity of Private Keys, crypto holders have lost a ton of dough.  What is disturbing to this observer is the appearance of weak governance.

Robbing The Bank  

Some of the worst security is in crypto wallets where last year hackers made off with more than $100 million in ether leaving holders with nothing.  As a believer in crypto and the owner of a few, I am put off every time that I log onto my wallet having to go through countless pages warning of the risks of storing coins in their vault and having my Private Key visible to hackers.  The suggestion is to pay up for one of several separate storage device at a price of about $100.  Of course transfering my crypto to this highly secure device will result in a fee charged by my wallet provider.  

I recently caught a story on a startup company Bitfury that is creating a set of software tools to track suspicious bitcoin activity.  That is very cool, of course, but that is just a startup and narrowly focused on one crypto.  The need is much larger.

Managing The Bank

People put their bucks in banks knowing their deposits are insured by the FDIC.  Banks are among the most heavily regulate business in the world.  Banks are in business to maximize the number of mindless transactions of their customers.

The movers and shakers of cryptocurrencies need to take action.  What has been done about Parity Technologies dating way back to last November? That was when a black swan event took place in the Ethereum ecosystem. A bug was activated in the multi-signature wallet released by Parity Technologies. The bug resulted in users permanently losing access to $150+million in frozen funds.

Democracy Doesn’t Work In Business

Governance in the crypto is as close to a pure democracy as can be found anywhere. Everyone’s voice gets heard.  Unfortunately that makes for slow decision making and most likely the reason why democracy doesn’t work well in business.  

After creating a possible solution to lost, frozen or hacked coins, developers have come up with a proposal dubbed EIP 867.  In simple terms, this creates a process by which requests from aggrieved holders could be submitted in a straightforward and executable format to a specified authority.

Common sense dictates there must be a mechanism for replacement of lost or stolen.  If you put your money in a bank and it is lost, the FDIC has your back covered.  If someone steals your credit card, you call the 800 number.  

However, the opposing point of view is that EIP 867 would threaten the integrity of the Ethereum platform.  According to recent news, this is an issue that is being hotly contested.  With all respect to the important details that may make this so controversial, long term believers in ether and all the other currencies prize security and the comfort of having recourse when bad things happen.

The Days Of Pure Speculation Are Over

In a recent article that addressed the current  stalemate in crypto pricing, I suggested that whatever speculative bubble that ever existed in cryptocurrency was over.  Now comes the time, with prices way off their highs, for long term investors to step up to the plate.  It doesn’t matter if these folks are newly created hedge funds or individuals, nobody is willing to see their funds disappear.  Before cryptocurrencies reach mass audiences, security must improve. The day that happens, prices will go significantly higher.

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 81 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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3 Comments

3 Comments

  1. elliottbailey

    March 2, 2018 at 3:27 am

    Love to hear more about why you feel the speculative bubble culture has gone/wont come back.

    Thanks for the article

    • James Waggoner

      March 2, 2018 at 6:29 pm

      Hello Ellott,

      Thanks for your question. By speculative bubble, I believe Bitcoin and others will be selling a vastly higher prices. What I meant to say is that speculative bubbles include investors who fail to see or choose to ignore the flaws in things like cryptocurrencies. Once those frailties have begun to come into the picture, the element of fear starts. This forces the assessment of risk and real or perceived awareness of loss changes the picture.

  2. Max Power

    March 2, 2018 at 11:42 am

    I was hoping this article would be better than it is.

    1) No attempt is made to discuss WHY there is opposition to a process by which people who have lost their funds can file for rectification of the supposed injustice. There are reasons, not all silly. An attempt should have been made to give this perspective, at least in passing.

    2) The writer says: “Governance in the crypto is as close to a pure democracy as can be found anywhere. Everyone’s voice gets heard. Unfortunately that makes for slow decision making and most likely the reason why democracy doesn’t work well in business.”

    The writer sees the entire world through the lens of Wall Street or something similar. Everything must follow old principles of business to this person, it seems. That is fine, but it is a limited perspective. Bitcoin was created by not a business nor someone wishing to create a business, but a computer science expert working in his basement (or wherever). Ripple is the business world’s answer, and appropriate to that fact, it is centralized and the code itself is held private and not open for public scrutiny. Whatever your opinion of the differences between the two, the reality is that the business/Wall Street perspective of the author here is very firmly in the corner of Ripple. And that is fine, but as a reader, just be aware of the limits of this type of worldview. Bitcoin and the blockchain would never have been invented or at least would not have developed in the same way, if everyone shared the business-centric view of the author. We would have a ‘blockchain’ eco-system developed along the lines of paypal and ripple. Not a decentralized bitcoin created by a bunch of random coders. So just be aware of the limits of this author’s worldview and his distrust of decentralization and democracy; his worldview would create a very different blockchain ecosystem from the one you currently see.

    3) No evidence is offered for the following claim: “Before cryptocurrencies reach mass audiences, security must improve. The day that happens, prices will go significantly higher.” It seems plausible, but it is still a claim, and should be backed up, if not by data, then at least by an argument.

    4) Finally, a bit more editing would go a long way. It doesn’t diminish the validity (or lack thereof) of your arguments, but it is just a bit frustrating to read when ‘s’s and ‘d’s are left off of the endings of a bunch of words.

    Anyways, just a few of my thoughts.

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Altcoins

All Sports’ SOC Token Dips Amid Poor World Cup Showing

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The All Sports SOC token has sunk 11% over the past 24 hours, falling to a three month low of $0.107. This takes All Sports back to a late April valuation, right before its market cap trebled over the course of a week in early May.

AllSports Market Analysis

The SOC token’s poor performance against the dollar today coincides with the failure of a member of its advisory board to secure a win in the World Cup game played last night in Russia.

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Sergio Aguero is listed as a consultant on the All Sports website, and even though he managed to grab a goal last night, his Argentina team ultimately failed to get a win against Iceland.

In all objectivity, the price of SOC tokens had been falling for the last few days, so while the football match may have had something to do with it, it seems unlikely to have had a major impact.

Indeed, the value of the SOC token has crashed 30% in the last three days, after a fairly strong week which saw it trade for $0.15 against the dollar. Its 24 hour volume at that time peaked at $54 million. Today it’s back down to $12 million.

Argentina is the team which Lionel Messi represents, and they were hailed as early favourites for the tournament earlier in the week. Their draw against Iceland was all the more embarrassing for the fact that many of the Icelandic players are amateurs who have full-time jobs in addition to playing football.

Trades against Tether (USDT) have made up more than 60% of SOC’s entire trading volume, with Huobi and OKEx being the main centers of activity. The next most traded pair is SOC/BTC, the majority of which can also be found on Huobi and OKEx.

A Sports Hub

All Sports advertises itself as a future hub for the entire sports industry. Their roadmap details plans to turn their platform into a media, betting and market site; an ambitious aim in an industry that’s worth an untold number of billions or even trillions each year. In the UK alone, the football industry is worth an estimated $5.5 billion a year, and that’s without factoring in the billions spent in bookmakers or on gambling sites.

Footballer Advisory Boards

Grabbing a high-profile footballer to help launch your ICO is becoming all the more common, and All Sports are continuing that trend by listing not just one, but two world-renowned football players on their advisory board page.

Alongside Sergio Aguero is the Chelsea and Belgium superstar Eden Hazard, and their presence on the All Sports website is all the more startling for the fact that they are the only team members listed on the site.

Belgium play their first game of the tournament tomorrow against lowly Panama – a team they will be expected to beat. Here’s hoping that his company’s market performance doesn’t affect his own performance in the game tomorrow.

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 10 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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Analysis

Crypto Update: Coins Consolidate Above Support but Downtrend Still Intact

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It has been a very quiet weekend for the major cryptocurrencies so far, as the predominantly bearish week ended with range trading and a collapse in volumes across the board. Most of the top coins failed to gain back the ground they lost during the steep selloff, with only Binance Coin and VeChain showing meaningful bullish momentum.

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The relatively strong Ethereum, EOS, and Ripple remained stable, with ETH hovering around the $500 level, EOS trading north of the key $10 support despite the network’s technical issues, and Ripple being stuck in a narrow range just below the widely-watched $0.54 resistance level. The total capitalization of the market has been virtually unchanged at $280 billion, as both Bitcoin and Ethereum flatlined.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin is trading right at the short-term support level near $6500, holding up just above the April low, with the crucial long-term support zone near $5850 that is vital for the whole segment. The coin is clearly in a short-term downtrend, while also being relatively weak on all time frames. The oversold short-term momentum readings are now cleared and that could point to a test of the lows in the coming days.

 

ETH/USD, 4-Hour Chart Analysis

Ethereum also cleared the short-term oversold readings, but it failed to leave the vicinity of the $500 support/resistance level. Despite the coin’s undoubted relative strength, and the still bullish long-term setup, the short-term trend signal remains a sell, and the declining trend is intact. Traders should still not enter new positions here, while investors could add to their holdings on the short-term selloffs. Strong resistance is ahead between $555 and $575, while further support is found at $450, $400, and $380.

Divide Widens between Leaders and Laggards

LTC/USD, 4-Hour Chart Analysis

Although short-term correlations skyrocketed during last week’s decline, the divergence between the relatively strong and weak coins got even more pronounced, with the likes of Litecoin, Dash, and Monero severely lagging the broader market. Litecoin got stuck below the $100 level after the breakdown last week, and it is below the long-term base pattern, as it failed to show relative strength during the weekend. Immediate support is found at $90, but new lows are likely in the coming days, as the short-term downtrend remains dominant. 

BNB/USDT, 4-Hour Chart Analysis

As a positive outlier, Binance Coin remained bullish amid the broad decline, holding on to the relative strength that it has been showing for several weeks. The coin’s stability is encouraging, and it’s nearing its rally highs with today’s surge, while having a good chance of resuming its uptrend, even as another segment-wide selloff could cause a jump in volatility again.

For now, the market is torn between bullish and bearish forces, and investors should focus on the technicals of BTC and ETH, while also keeping an eye on the leaders of the rally for signs of sutained strenght.

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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Analysis

Long-Term Cryptocurrency Analysis: Bull Market in Jeopardy

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As the crucial rally attempt that we pointed out in our previous long-term analysis failed, and the major coins sold off heavily afterwards, the segment is now in a difficult situation. While Bitcoin and especially Ethereum are still in bullish setups, the most valuable coin is now close to a major breakdown that could lead to structural bear market as we laid it out back in January.

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Some of the weaker coins are already below the large-scale consolidation patterns that developed after the year-end run-up, and as the divergence between the leaders and the laggards widens, the path of the two dominant coins even more importance.

BTC/USD, Daily Chart Analysis

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Bitcoin failed to trigger a short-term buy signal throughout the Ethereum-led rally in May and early June, and that technical weakness still persists, as BTC is now trading right at the April low, testing the key long-term base pattern.

A break below the strong support zone near $5850 would be the first similar event since the beginning of the bear market in 2014, and it could lead to an extended period of bearish bias for Bitcoin after the spectacular bull run of 2017. For now, the bull market is intact, with support found near between $6000 and $6275, at $5850 and below that at $5500, while resistance is ahead at $6500, $7000, $7350, and $7650.

ETH/USD, Daily Chart Analysis

Although Ethereum is clearly stronger from a technical perspective compared to Bitcoin, the coin is struggling to hold the key $500 level, as it is resumed its short-term downtrend. The April lows are well below the current price level and the long-term setup is bullish, so long-term investors could still add to their positions during the selloffs. Resistance above $500 is ahead between $555 and $575, while strong support is near $450, $400, $380.

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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 275 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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