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What Economists Don’t Understand About Bitcoin

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Of all the things to irritate a Bitcoin enthusiast, perhaps the worst is when economists come out with their negative opinions regarding Bitcoin. Paul Krugman, the prince of establishment economists, recently publish “Transaction Costs and Tethering”. The article explained why he believed Bitcoin would collapse, and was designed to create controversy.

The first thing we all need to realize is that Bitcoin is at its core an anti-establishment construct, whereas economists are all “buyers” of the current system and believe it is working well. These economists look at HODL’ers belief that Bitcoin is a hedge against the fiat system as a fringe bet, whereas Bitcoiners generally believe there are major problems endemic in the system.

Bitcoin as an Inefficient Protocol

The common point naysayer will make (and Krugman did rest heavily on this point) is that Bitcoin is extremely inefficient. The amount of electricity it uses and fees charges for transactions is higher than any option in our current system, and it is a step backwards.

What these criticisms fail to factor in is the fact this is all on purpose. Efficiency isn’t always a good thing. The army maxim “two is one, and one is none” could be considered inefficient, but sometimes survival is more important than efficiency.

Efficiency is what has brought about much of global warming and pollution. It was “more efficient” to do things a certain way, but that also led to short-term compromises of the future. And as more investors come out to say we can expect major problems in our future due to the way the economy has been run, it is possible that the way the pensions, fiscal deficit and financial markets have been managed might not have been the safest way.

Safety in Volatility

Bitcoiners tend to believe that Bitcoin is a safer method than the current system, even though there is a high degree of volatility. All the risk is visible, like waves on a lake, whereas the dangerous part lies beneath the water.

The argument that the current fiat system has held up well is true, but that says nothing about where the market is going to go in the future. As we know regarding investment funds, past performance doesn’t indicate future returns. This applies to the entire financial system and is exactly why Bitcoin is taking such a strong hold on the zeitgeist at this period in time.

Economists seem generally unable (or unwilling) to grasp the idea of an impending crash that changes the entire economy. But then again, were they ever able to accurately predict crashes and crises in the past?

What This Means For the Future

The fact that this group of financial experts can’t understand the “doom and gloom” predictions of those who are pro-Bitcoin says a lot about how they think about risk in the markets. The future is always uncertain, and an improvement in efficiency today says nothing about improvements that may occur tomorrow. It may be preferable to have a robust solution that can withstand a massive crisis than to put all of our trust in banks.

If anything, the real estate crash of 2007 and continuing sovereign debt crisis should be enough of a problem that we can all admit the system isn’t perfect. Yes, the US dollar has served the economy well until now, but the future is always uncertain. Efficiency has gotten us this far without major calamity, but it might be time to focus on safety in the markets as well. And as anyone who has struggled to put a life jacket on knows, safety is inefficient.

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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Bitcoin

Top 3 Price Prediction Bitcoin, Ripple, Ethereum: Good Things Happen to Those Who Wait

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  • Signs of weakness appear while playing on the edge.
  • ETH/USD must lead now or suffer for months.
  • BTC/USD does not work for either side of the market.

The most rising value right now is patience. In a world where everything goes faster than our mind is capable of handling, patience is today a value that is not taught and even less praised.

However, in professional trading, being patient is an asset as valuable as money. They are directly correlated, the less patience, the less performance, and vice versa.

As one of our contributors, known as Colibri Trader, wrote:

Some traders fail to realize that to be successful will take time. They often fall prey to their own impatience in the hope of earning fast money. It could be a rough environment, and charts might be hard to read, so it is wise at times to step back in order to avoid costly mistakes. Don’t rush things out, or try to enter in a trade at all costs by just following your gut. The market could be quite tricky and often does send out the wrong signs. Wait patiently for the best opportunities to align themselves and then act mercilessly.

ETH/BTC Daily Chart

The ETH/BTC pair insists on testing analysts’ patience with their dangerous game on the edge of the bearish landscape. The setup says with clarity, perhaps excessive, that this point will not be passed and that this is the best point to enter long into the Ethereum.

The MACD in the daily range is turning bullish just above the line dividing the upside of the bearish side of the indicator. The DMI shows the bears with a slight advantage, but the fact that the bulls stay above level 20 adds bullish potential.

Perhaps too evident, although sometimes the market gifts money.

BTC/USD 240 Minute Chart

BTC/USD is currently trading at the $3,505 price level, moving away from the $3,530 price congestion resistance line.

Below the current price, the next support level is $3,460 (price congestion support). This price level separates the current, lateral scenario with the openly bearish scenario that the BTC/USD pair has already visited the first week of December. The loss of this level of support would mean moving quickly to the third level of support at $3,300 (price congestion support).

Above the current price, the first target is at $3.530 (price congestion resistance). The second resistance level is at $3,600 (price congestion resistance) and only a few dollars above the EMA50 at $3,609. The third resistance level is at $3,690 (price congestion resistance). If BTC/USD can conquer this price level, the strength of the bullish trend would quickly be tested with the SMA100 at $3,708 and then the SMA200 at $3,772.

The MACD on the 4-hour chart shows a flat profile that projects an imperfect trajectory towards an upward cut. This pattern usually produces bearish rejects.

The DMI on the 4-hour chart shows bears picking up inertia and increasing their trend strength. The bulls lose power and move below level 20, confirming the weakness of the buying side. The ADX begins to react to the bear’s dominance and confirms the increase in bearish trend strength.

ETH/USD 240 Minute Chart

ETH/USD is currently trading at the $117 price level, just below the $118resistance level (price congestion resistance).

Below the current price, the first support level is at $109.50 (price congestion support). Should the Ethereum lose this first support, the next support is at $105 (price congestion support). The third level of support is at $97 (price congestion support).

Above the current price, the first level of resistance is at $118 (price congestion resistance). Above this first resistance the most critical area of the graph is presented immediately, with a second dynamic resistance at $122 (EMA50) that would give way to a rock wall at the price level of $130 (price congestion resistance) and reinforced by the SMA100 at $131 and the SMA200 at $133.

The MACD on the 4-hour chart shows a profile similar to that of the BTC/USD pair although in this case with a little more bullish inclination and therefore, more chances of success on the bullish cross.

The DMI on the 4-hour chart also shows differences from the BTC/USD. Here the bears follow a downward trend while the bulls remain at the same level in the last few days.

XRP/USD 240 Minute Chart

XRP/USD is currently trading at the $0.317 price level, above the $0.31 support level. Of the TOP 3 components of the crypto market, XRP is the one with the best technical aspect.

Below the current price, the first level of support is $0.31 (price congestion support), followed a little lower by the second level of support at $0.308 (price congestion support). The third level of support is at $0.296 (price congestion support), a level that would already indicate a return of the XRP to the fully bearish scenario of early December.

Above the current price, the first resistance level is dynamic at $0.327(EMA50). The second resistance level is at $0.335 (price congestion resistance), followed by an obstacle race for the SMA100 at $0.34, a price congestion resistance at $0.345 and another dynamic resistance at $0.365(SMA200).

The MACD on the 4-hour chart shows that there was a small bearish reversal yesterday. A second bullish cross attempt may occur today.

The DMI on the 4-hour chart shows the bears in an apparent decline. The bulls copy and withdraw as well, which shows a lack of confidence on both sides of the market.

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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What Joe Rogan and His Billions of Viewers Have Learned About Bitcoin, Crypto and Blockchain

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Podcast powerhouse Joe Rogan has been dipping his toes into cryptocurrency ever more frequently since Andreas Antonopoulos made his first of four appearances to date on the show back in early 2014.

In the intervening years, a potential billion monthly listeners have frequently been exposed to informative, educational, and sometimes controversial, cryptocurrency conversations on the podcast platform. These have been conducted by blockchain evangelists (Dr. Ben Goertzel) as well as hardcore skeptics (Peter Schiff), and have explored a plethora of crypto and blockchain’s potential uses.

So, amid the cacophony of opposing thought and opinion the largest media platform in the world has exposed its viewers to, just what will the JRE viewers have taken away from the podcast’s crypto-centric episodes?

The Good

Crypto fundamentalists would have been more thrilled with Anton Antonopoulos’ appearances on the show than blockchain fanatics. Antonopoulos makes no secret of his desire to see crypto shake up the existing global financial paradigm, and Rogan’s somewhat lefty/hippy nature assured he received these ideas enthusiastically.

“All you creeps that are controlling money all throughout the world… your time is slowly closing in. Am I right?”

That’s the question with which Joe Rogan opened JRE #844 – Antonopoulos’ fourth appearance on the show. Andreas answered with a simple ‘Yep’, and went on to explain the phenomena which saw the banking industry make a (devious?) move into the blockchain world:

“ (In 2015) The media was constantly bashing Bitcoin. And then… we saw this interesting phenomena where the banks started getting interested…not in Bitcoin, but in blockchain – the technology behind Bitcoin.”

The best side of cryptocurrency – its potential to wrestle financial control from the hands of our global banking overlords – is best displayed during Antonopoulos’ appearances on the show, and are worth a listen for his wonderful analogies alone:

It’s rather amusing. I look at that a bit like the Horse-Buggy Association of America is going: ‘we like this automobile thing you’ve designed, but we have a very big investment in hay and horses, stables and veterinarians, so we’re going to use the technology behind the automobile – the pneumatic tyre – and we’re going to revolutionize horse-buggies.’”

The Bad

Perhaps the worst side of cryptocurrency to be exposed on JRE is its tendency to find itself the target of hackers and thieves. More than once Rogan and guests have brought up some of the ridiculous sums of cryptocurrency stolen in recent years, and the conversations usually end with a hopeful plea that one day ‘they’ll find out how to make it more secure’.

Of course, the vast, vast majority of crypto thefts to date have taken place on exchanges. Holding this up as an example of crypto’s lack of security is like blaming a car for getting stolen, even though you left it out in the middle of the road with the engine running – or worse – placed the keys in the hand of the thief yourself.

The Ugly

The ugly truth which investment broker and financial commentator, Peter Schiff, thought he was unveiling on JRE went something like this: Bitcoin has no value; Bitcoin is doomed; Buy more gold. On JRE #1145, Schiff said:

“Bitcoin is trying to digitally replicate the properties of gold. That’s the whole selling point – they say it’s digital gold. And it does have a lot of gold’s properties which help it succeed as money, but it doesn’t have any of gold’s physical properties that gave it so much value in the first place.”

Schiff also caused a stir back in July 2018 when he placed a $1,000 price prediction on BTC, and ridiculed its ‘fake scarcity’. Despite Schiff’s pessimism, and the furore that his appearances always cause, he has probably added some much needed healthy skepticism to the podcast over the years – even though most here would disagree with him completely.

The Future

With Andreas Antonopoulos slated to re-appear in the coming months – his first appearance in over two years – it will be interesting to get his take on the ICO madness of 2017-2018, the market’s ATH, and its subsequent drop-off since then.

Whether you’re a fan of JRE or not, the podcast might end up playing a bigger part than most in spreading crypto and blockchain awareness around the globe.

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 125 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 Price Remains Motionless as Bulls, Bears Lack Confidence

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Bitcoin’s trading range continued to narrow on Tuesday, reflecting a lack of committal from the bulls and bears following the weekend pump-and-dump.

Lack of Direction

The bitcoin price fluctuated within a $60 range on Tuesday, according to data provider CoinMarketCap. At the time of writing, BTC/USD was averaging $3,588.94, where it was virtually unchanged compared to Monday. On individual exchanges, bitcoin fluctuated between $3,563 (HitBTC) and $3,627 (Bitfinex).

Trading volumes in the last 24 hours exceeded $5.1 billion, with derivatives platform BitMEX processing nearly 16% of the transactions. Bitcoin trading activity has witnessed a considerable uptick in South Korea, with BTC/KRW transactions climbing.

At current values, bitcoin has a total market capitalization of $62.8 billion, accounting for 52.5% of the entire crypto universe. The total cryptocurrency market was last valued at $119.7 billion.

Bitcoin experienced large fluctuations over the weekend, rising 4% on Saturday and falling nearly 3% on Sunday. Altcoins and tokens followed closely in its footsteps, a trend that has intensified during the bear market.

Longest Bear Market in History Looms

In less than one month, bitcoin will enter its longest bear market in history. As of Tuesday, the crypto bear market has lasted a whopping 396 days. The longest bear trend ever observed was in 2014-15, when it stretched on for 420 consecutive days.

Longest Bear Market in Crypto History?

The bitcoin price bottomed near $3,100 in December before staging a large rally into the new year. After climbing more than 30% from last month’s low, price action has been largely confined to the $3,500-$3,700 range.

Bitcoin’s posturing in the latter stages of the bear market underlies a significant lack of confidence among traders. This technical tug-of-war has made it difficult to gauge the future trajectory of bitcoin and, by extension, the broader cryptocurrency market. The fundamental issue for many traders is determining whether bitcoin has reached a definitive bottom or whether prices will come barrelling down again. A longer historical track record makes technical analysis more trustworthy than in the past, but in the case of bitcoin, uncertainty around regulation and mainstream adoption make purely technical indicators insufficient in analyzing the market.

To that end, markets are setting their sights on the February deadline for the VanEck SolidX Bitcoin Trust, a highly-touted bitcoin ETF that could hasten crypto adoption among retail investors. Cryptocurrency advocate and CBNC contributor Brian Kelly believes there is virtually no chance that the SEC approves the ETF in question. In his view, a bitcoin ETF is at least a year away. This view is fairly consistent across the board, though many in the financial community believe a bitcoin ETF is only a question of when and not if.

More on the crypto ETF debate: Crypto Markets Get a Boost Heading Into the Weekend as Debate Over Bitcoin ETF Intensifies.

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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4.7 stars on average, based on 743 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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