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Cryptocurrencies

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?

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.

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 115 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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Cryptocurrencies

Syscoin (SYS) Makes Comeback Amid Downturn; 76% Spike Ahead of Project Rebrand

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Syscoin (SYS) was a stable fixture in top ranked coins by market cap earlier in 2018, but a 97% decline throughout the year saw the coin depart CoinMarketCap’s front page, and eventually hit a new twenty-month low on December 13th.

That’s when everything changed for SYS: a 15,500% increase to trade volumes helped fuel a 76% comeback recovery, all of which occurred in just over a day. Social media mentions for the decentralized marketplace project also surged in the last day, with Twitter and Reddit receiving an influx of SYS related posts and activity.

All of this comes ahead of a project revamp which is set to be launched on December 18th.

Syscoin Price – SYS/BTC

Over 90% of daily trades came against BTC in the last twenty-four hours, with Binance housing the majority of the action.

From a starting price of $0.029109 (883 sats) on Thursday evening, Syscoin jumped 76% up to $0.051509 (1579 sats), with the peak landing on Saturday morning. Several huge pumps from BTC traders on Binance kept the run going, as can be seen above.

Prior to the surge, Syscoin was nursing wounds from 97% losses since January, and the dollar valuation in the $0.029 range hadn’t been seen since April of 2017. The satoshi value of 883 hadn’t been witnessed for even longer.

Origins of the Pump?

The price rise does coincide with the lead up to Syscoin’s project rebranding, which is set to go ahead on December 18th. It wouldn’t be too cynical to assume a playful little pump and dump in anticipation of the event, however, some Syscoin supporters see larger reasons at play.

According to one recent post in a Syscoin traders group, Syscoin is pumping for a multitude of reasons, including:

“…Syscoin Core 3.2 is coming…Fusion is coming…BMD 3.2 is coming… SYSio is coming…”

The list of upcoming Syscoin developments goes on, and could very well be a catalyst for the increased action we’ve been seeing since Thursday night.

But then, show me a crypto/blockchain project that doesn’t have a whole host of developments coming and I’ll show you something similarly fanciful.

Syscoin on Social Media

Twitter bots picked up increased chatter on the Syscoin front, with a 228% increase in tweets coming in by Friday night. The surge continued since then, but as noted at the time:

“Syscoin up 45.76% on a 1,212% increase in trading volume. Daily sentiment remains high on a 228% increase in tweets. #SYS only accounts for .02% of overall crypto market cap, but .18% of tweets today.”

Syscoin was one of the earliest ICO launches back in 2014, and was the first blockchain to implement the Lightning Network on its mainnet in April of 2017.

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 105 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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Bitcoin

Bitcoin Price Scrapes the Barrel While Stellar (XLM) Losses Fall in Line

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Bitcoin returned to its lowest valuation of the year on Friday, as the last week of cautious upward movement by the crypto market came to a crashing halt.

Just last week BTC fell to a dollar valuation in the high $3,200 range – a fifteen-month low at the time. After seven days of false hope and another rinsing of weak hands, BTC returned to the same valuation early on Friday morning – a sign that $3,000 is destined to act as a baseline in the short-term?

Meanwhile, after months of positive developments and upward momentum, Stellar (XLM) is finally feeling the pinch and may be about to fall back in line with average market losses. XLM’s valuation is down over 18% for the week, and 7.5% for Dec 14th alone – leaving Tether (USDT) waiting in the wings to take over XLM’s 4th spot ranking by market cap.

Bitcoin Price – BTC/USD

Bitcoin fell 4.75% leading into Friday morning, compounding 10% losses over the last five days. From the daily high of $3,448, BTC found itself trading as low as $3,200 on some exchanges, while the aggregate valuation drawn from all exchanges remains closer to $3,300 at time of writing.

Bitcoin volume remains high while overall trade volume has declined. This has sent BTC dominance to over 55% again, and may be the beginning of a trend which sees altcoin gains continually cashed out to the more trusted BTC (via USDT) for the duration of the bear market.

Stellar Price – XLM/USD

A portion of those gains may now be coming from the Stellar market, which is being dominated by USDT and BTC trades as of Friday.

From the daily peak of $0.111740, XLM’s valuation fell to £0.103288 by noon Friday. That’s a 7.5% decline for the day, and comes on top of 18.3% losses over seven days as Stellar finally seems to be falling in line.

Stellar had kept the bears at bay for much of the prolonged market dip in the last few months, even rising in the rankings to become the 4th highest capped cryptocurrency. Fuelled by prominent announcements and almost constant speculation regarding a Coinbase listing, XLM managed to buck the trend and hold onto its value while all around it were losing theirs.

Now, this latest dip has singled out XLM specifically, leaving the coin’s losses firmly in line with ETH and the major alts’ +60% losses since mid-November. Once valued at nearly $17 billion by market cap at its peak, Stellar is now valued at less than $2 billion, and only the slightest fluctuation by ‘stable’ coin, Tether, would drop XLM out of the top four ranked cryptos.’

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 105 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: Majors Testing Lows Following Broad Selloff

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The major cryptocurrencies have been once again under pressure in the past 24 hours and most of the coins got very close to their recent lows, even as the losses are limited for now. While the top coins avoided a breakdown, given the overwhelmingly bearish long-term picture and the steep short-term trend, odds continue to favor new lows in the coming weeks, so traders and investors should still remain defensive.

Dash/USD, 4-Hour Chart Analysis

The continued technical weakness in the lagging coins, like Dash, and the lack of a relatively strong leadership is still apparent, and it reinforces the bearish overall picture. That is true even as the long-term momentum indicators are showing deeply oversold readings and investors sentiment remains very negative which could lead to a larger scale correction after a short-term trend change. That said, traders shouldn’t enter new positions here until we see meaningful short-term technical improvements.

BTC/USD, 4-Hour Chart Analysis

Bitcoin failed to regain momentum despite the weekend bounce and the coin is back near its recent low trading near the $3250 level today. The key $3600 level is out of reach for the most valuable coin, and with that in mind, our trend model remains on clear short- and long-term sell signals.

The current weakness of BTC is a negative sign for the whole segment, and a test of the key long-term $3000 level is more and more likely. Further string resistance is ahead between $4000 and $4050, and traders and investors shouldn’t enter positions here.

ETH/USD, 4-Hour Chart Analysis

Ethereum has been trading in a very narrow range in recent days, and the coin is still stuck below the key $95-$100 zone, as it failed to show relative strength despite being among the most oversold majors. ETH also faces strong resistance near $120 and $120, with the next major support zone found between $73 and $75, and traders and investors should still stay away from the coin.

Litecoin Breaking Down Again?

LTC/USD, 4-Hour Chart Analysis

Litecoin is threatening with another break below support today, with the $23 support level looking very weak now, and the steep short-term downtrend remains clearly intact in the coin. LTC continues to be relatively weak from a short-term standpoint, and traders shouldn’t consider even ultra-short term positions here, despite the deeply oversold broader picture.

The next major support zone is found between $20 and $20.50 and odds favor a test of that zone as soon as in the coming days, with strong resistance found near $26 and $30.

XRP/USDT, 4-Hour Chart Analysis

Ripple continues to hover around the $0.30 level, still being very weak on the short-term time-frame, and being on sell singles both short- and long-term in our trend model. XRP faces strong resistance near $0.32, $0.3550, and $0.3750, while primary support is found at $0.28, with the prior bear market low being at $0.26. We expect at least a test of the lows in the coming weeks, despite the still relatively strong long-term technical setup and new low bear market lows are also likely in Ripple.

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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4.7 stars on average, based on 416 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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