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Investing $100 in Bitcoin in 2010 Would Have Led to $75 Million in Profit

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Bitcoin bull run

Earlier this week, Tai Lopez, the highly regarded investor and philanthropist, revealed that a $100 investment in bitcoin in 2010 would have led to a $75 million profit.

Within eight years, bitcoin has evolved into the most valuable and secure decentralized financial network in history, achieving a $72 billion market cap. No other decentralized technology has ever secured such a large market cap.

Factors Behind the Exponential Growth of Bitcoin

In general, the demand for bitcoin and cryptocurrencies is increasing at a rapid rate. Particularly, casual, professional, and institutional investors are beginning to adopt bitcoin as a safe haven asset, digital currency, and a store of value. Because it is decentralized, governments and authorities are limited in what they can restrict and regulate.

As prominent venture capitalist and NBA’s Golden State Warriors owner Chamath Palihapitiya stated:

“Absolutely not [bitcoin is not a fraud]. It cannot be a fraud. What countries can constrain today is how it [bitcoin] is effectively traded but it cannot be controlled. It is a fundamentally distributed system that exists peer to peer. And so to the extent that you can basically eliminate the will and the actions of every single person in the world, you can eliminate it. But in the absence of that, the genie is fundamentally out of the bottle.”

Outside the realm of early-stage investors in bitcoin such as Tim Draper and Palihapitiya, investors who were previously skeptical toward bitcoin and condemned the digital currency have started to acknowledge the growing demand for bitcoin and cryptocurrencies.

Most recently, Mark Cuban confirmed that he has purchased several bitcoins through a bitcoin exchange-traded note (ETN) in the Swedish stock market. XBT Provider, one of the few bitcoin ETN providers, has been operating in the Swedish Nordic Nasdaq, providing liquidity to professional traders and institutional investors.

“It is interesting because there are a lot of assets which their value is just based on supply and demand. Most stocks, there is no intrinsic value because you have no true ownership rights and no voting rights. You just have the ability to buy and sell those stocks. Bitcoin is the same thing. Its value is based on supply demand. I have bought some through an ETN based on a Swedish exchange,” said Cuban at the Vanity Fair New Establishment Summit in Los Angeles.

Many analysts, traders, investors, developers, and entrepreneurs remain certain that as bitcoin continues to evolve as the leading decentralized financial network, its market cap would surpass the $1 trillion mark and challenge existing financial systems such as fiat money, reserve currencies, and assets such as gold.

Earlier this year, Dennis Porto, a bitcoin investor and Harvard academic, told Business Insider that the bitcoin price can very likely reach $100,000 if it follows the Moore’s law.

“Moore’s law specifically applied to the number of transistors on a circuit but can be applied to any digital technology … Any technology that is growing exponentially (i.e., ‘following Moore’s law’) has a doubling time,” noted Porto.

Based on bitcoin’s maximum supply of 21 million, the price of $100,000 per bitcoin would lead to a $2.1 trillion market cap for bitcoin.

Trading volumes are rising but volatility is decreasing. Positive indicator of long-term growth.

Kay Van-Petersen, a senior analyst at Saxo Bank, who accurately predicted the bitcoin price surge in early 2017 when the bitcoin price surpassed $2,000, also stated that there is a strong case for bitcoin reaching a value of $100,000.

“Volumes are going up, volatility is going down. A lot of people talk about the volatility, but if you are in Zimbabwe or Venezuela, this volatility is nothing. This is the interesting thing to me. I think in the West, a lot of people view it is as speculative, but emerging markets will get it, their needs will be different,” Van-Petersen explained.

Acknowledging that bitcoin is still at its early stage in development, adoption, and scalability, newly emerging investors in the cryptocurrency market are not late in investing in bitcoin and understanding the technology behind the cryptocurrency.

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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4.1 stars on average, based on 5 rated postsJoseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.




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2 Comments

2 Comments

  1. El Euther

    October 6, 2017 at 7:32 pm

    2010. Not 2014. Headline and first sentence are pretty wrong.

    • Joseph Young

      October 8, 2017 at 7:35 am

      Where does it say 2014? “2014” doesn’t appear once in the article. Please read properly before saying the article is wrong. I haven’t said 2014 once.

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Analysis

Crypto Update: Another Rally Attempt in Crypto-Land

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The major cryptocurrencies are all trading slightly higher today, following two bearish days that brought them back to last week lows, and for now, another breakdown has been avoided, despite the overwhelmingly bearish broader picture. The modest bounce left our trend model on sell signals across the board, and odds continue to favor new lows in the coming period, so traders and investors should remain defensive here.

The top coins are trading well below the weekend bounce-highs and without new swing highs, the short-term trend also remains clearly bearish, even considering the deeply oversold long-term momentum readings and the abysmal sentiment. So while a larger scale bounce remains possible in the coming weeks, perhaps following a failed breakdown pattern, bulls should still be patient until we sell clear technical improvements in the segment.

With that in mind, traders and investors shouldn’t enter positions even in the slightly stronger coins, and odds still favor the continuation of the bear market, with new lows likely in the coming days. That said, a successful test or a failed breakdown could trigger a larger scale correction, with the broader picture still being deeply oversold and with investor sentiment still being very negative. For now, there is no sign of an imminent rally, with all eyes on the $3000 in Bitcoin.

BTC/USD, 4-Hour Chart Analysis

Bitcoin rallied as high as $3450 today, but it failed to get close to the $3600 resistance and the weekend high, so the short-term downtrend remains intact despite the bounce. For now, our trend model is still on sell signals on both time-frames, and traders should stay away from entering new positions here, with the long-term picture also being clearly bearish.  Further resistance is ahead in the $4000-$4050 zone, while key long-term support is found near the $3000 price level.

ETH/USD, 4-Hour Chart Analysis

Ethereum is stuck below the key $95-$100 zone even following today’s bounce, keeping the coin on a short-term sell signal in our trend model. Odds still favor a move towards the next major support zone between $73 and $75, and only a quick recovery above the primary resistance zone could change the short-term trend.

The steep long-term downtrend is clearly intact in the coin, and traders and investors should still not enter new positions here, with further strong resistance zones ahead near $120 and $130.

Altcoins Avoid Breakdown but Strong Resistance Zones Lie Ahead

Dash/USDT, 4-Hour Chart Analysis

Despite yesterday’s weakness, last week’s lows held up even in the relatively weaker majors, and although that’s an early sign of stability, it’s not enough to warrant upgrades in our trend model. With still no bullish leadership present in the segment the continued technical weakness in the lagging coins, such as Dash reinforces our bearish long-term view.

XRP/USDT, 4-Hour Chart Analysis

Ripple only experienced a weak bounce, and although it continues to trade near the $0.30 level, the coin is still among the relatively weak coins from a short-term perspective and the renewed long-term sell signal is also in place.

We still expect a move towards the prior bear market low near $0.26, with a weaker support level found above that near $0.28, and traders and investors shouldn’t enter positions here, with resistance levels above $0.30 ahead at $0.32, $0.3550, and $0.3750.

Litecoin/USD, 4-Hour Chart Analysis

While Litecoin managed to hold up above its recent swing low and the $23 support level, it remains in steep short- and long-term downtrends, and we would need to see significant technical strength for even a short-term trend change.

Our trend model is on sell signals on both time-frames, and below $23, the next major support zone is found between $20 and $20.50 with strong resistance ahead near $26 and between $30 and $30.50.

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 413 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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Analysis

NEM Update: Good Time to Buy the Dip

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What would you think if we told you that NEM (XEM/BTC) is a crypto leader in terms of chart analysis? Many would think that this statement is preposterous. After all, the market is still down by 85% from the 2018 peak of 0.000137. In September, it was even down further by over 90% when it dropped to 0.00001257. Saying that it is a crypto frontrunner may sound absurd.

In reality, however, it is.

NEM reversed its trend before any other large-cap altcoin. On top of that, it provides us a roadmap as to how large-cap cryptos can jump-start their bull cycle. In this article, we reveal why it is a good time to buy the dip.

Accumulation at the Parabolic Support

Market cycles often end where they began. In the case of NEM, the bear market ended when it dropped to the parabolic support area. If you look at the weekly chart, the range between 0.000014 and 0.000016 was the market’s resistance back in March 2017. When the market took out the resistance, it blasted off to 0.00013980 in May 2017.

In addition, this level provided much-needed support back in December 2017. NEM wicked down to this parabolic support area and briefly breached it. When the market recovered the support, NEM skyrocketed.

Weekly chart of NEM

This price action tells us that the range between 0.000014 and 0.000016 is important for market makers. They have defended that area in the last two market cycles. It appears they are doing the same now.

A look at the weekly chart shows that NEM traded within that range from August to November 2018. NEM has never moved within a relatively narrow range since March 2017. This tells us that the smart money used the parabolic support to accumulate positions. With a new base established, the market should soon be ready to launch the markup stage of the new cycle.

Launch of the Initial Pump

A big bullish breakout is the most reliable signal that the accumulation phase is over. In the cycle of market emotions, this is the stage where participants view the pump as a sucker’s rally. Having spent almost all year in the bear market and watching NEM get devalued by more than 90%, people have been conditioned to be pessimistic. Many won’t buy the breakout because they believe that the market will eventually resume its slump.

NEM’s initial pump just proved this point.

On November 12, the market printed volume that’s over 1,214% of its daily average. That’s an astronomical volume surge! This triggered the breakout from an inverse head and shoulders pattern on the daily chart.

Daily chart of NEM

One can only assume that the smart money is behind this move because there’s no way retail traders would instigate such a breakout. On top of that, observe how volume significantly declined after the pump. This is another signal that retail investors are yet to get a piece of the action. For them, this is nothing but a sucker’s rally.

However, a closer look at the market reveals that the rally to 0.00002249 on December 10 created NEM’s first higher high this year. This is a technical signal indicating that the market has turned slightly bullish. We know it’s hard to believe but the next section should help clear your bearish bias.

Anticipate the Higher Low

Basically, a market is considered bullish when it generates a higher high and a higher low. So far, NEM has given us a higher high. Technically, the low of 0.00001385 on October 29 is also a higher low as it acted as the right shoulder. Nevertheless, a higher low that’s above the accumulation range should be very convincing.

Fibonacci levels of the current range

If the market creates a higher low near the breakout, then NEM has sufficiently met the basic definition of a bullish market. This will be a good time to buy the dip.

Bottom Line

NEM acting as an altcoin leader may sound far fetched. However, the accumulation at the parabolic support and the technical reversal show that NEM is ahead of its peers. Also, its bullishness can be further solidified once it manages to print another higher low. That would be the point at which to buy the dip.

 

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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3.8 stars on average, based on 286 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Altcoins

EOS Price Analysis: Cardano Founder Charles Hoskinson Warns of Regulatory Action Against EOS

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  • Charles Hoskinson projects some form of action from the SEC on EOS.
  • EOS/USD enjoys a relief rally on Wednesday, as price moves further north following recent bounce.

The EOS price hasn’t done much but decline of late. Back in August, EOS/USD entered into a very stubborn narrowing range. The price had been confined within this mode of trading right up until November. The range was seen from the $6 territory down $4 area. On the 19th November, EOS/USD bears had finally pushed for a breakout to the downside, from this mentioned range-block. Following this fall, the price plummeted over 60%, over the course of 3 weeks.

Cardano Founder Hoskinson Expresses EOS Regulatory Concerns

The Cardano (ADA) founder, Charles Hoskinson, has beliefs that EOS chief developer of the network is likely to face strong action from regulatory bodies. The SEC would be a potential regulator that investigates their $4bln ICO, as he has described as “egregious.”

Speaking at a press conference in Edinburgh, Charles Hoskinson has made a projection that the Securities and Exchange Commission will look at taking firm measures against Block.One. He believes that this would be done due to the way it had run and hosted the EOS ICO.  Hoskinson further detailed how the EOS token sale sits within the remit of the regulators for them to review the potential for harm of retail investors in the United States.

Charles Hoskinson Anticipating SEC Action on EOS

Hoskinson predicted that the SEC will likely bring punitive measures against Block.One for the way it ran the EOS Initial Coin Offering. The IOHK leader explained that EOS’ token sale falls well within the regulator’s remit to take action against any financial activity which harms US retail investors.

There were several fundamental issues with the EOS ICO, which clearly raise red flags, from Hoskinson’s view. He expressed for particular focus on the amount they had raised over the course of a year, in addition to their “utter lack of respect” for investors. Hoskinson said, the SEC “needed” to take action.

Technical Review – EOS/USD

EOS/USD daily chart

Most recently, the price has managed to stabilize, which could be due to sellers exhaustion. A bounce was seen on 7th December, after falling to a low of around $1.55. The bulls are attempting to make a convincing push back into the $2 territory. Demand in the near-term should now be observed from that recent low, $1.55 up to $1.80.

It is interesting to note the area of which EOS/USD received some comfort on 7th December (this is a known acting support). Back in November 2017 during the big bull run, the price consolidated within the mentioned demand zone for a brief period. This came before continuing its strong move to the north.

Downside Observations

EOS/USD daily chart

Should the near-term area of support fail to hold, then there could be some devastating moves to the downside. A breach of the $1 mark could very well be seen. The next major demand area will be within the depths of $0.90 region. EOS/USD had last traded down here again within the early part of Nov 2017 bull run.

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 80 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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