CryptocurrencyNews Analysis

Cryptocurrencies Are About To Go Crazy

By December 4, 2017 No Comments
It's about to get weird. There's nothing normal about cryptocurrencies, which depending on who you ask are either a bubble or the speculative investment of a lifetime. On December 18th at the sound of the opening bell, they'll suddenly be connected to the world economy.

It's about to get weird. There's nothing normal about cryptocurrencies, which depending on who you ask are either a bubble or the speculative investment opportunity of a lifetime. On December 18th at the sound of the opening bell, they'll suddenly be connected to the world economy.

Disclaimer:  The information in this blog represents the opinions of its author and is for educational purposes only.  It is not intended as investment advice.  Cryptocurrency markets are extremely risky so you should only invest money you are willing to lose.

Into The Game

Imagine you're an investor with a $10 million portfolio. You've heard all the kids talking about these new digital coins and you've been thinking about getting into the game.

You've also heard of Silk Road and Mt. Gox, Chinese bans and Jamie Dimon bubble-talk.

You figured maybe you'd take the plunge and try to make some money - putting a small percentage of your portfolio into cryptocurrencies, but as it turned out, electronically linking your bank account to some sketchy exchange you've never heard of, one that you worried might be hacked or shut down, scared the bejeezus outta you - so you just stayed on the sidelines.

99.9% of the world yet to conquer.  According to James Altucher, ""There's $200 billion in cryptocurrencies out there and over $200 trillion in demand for money".  When the CME begins trading on Dec. 18th, bitcoin will become a player in the $20 trillion daily futures markets.  ALtucher predicts bitcoin will eventually exceed $1 million in value.

99.9% of the world yet to conquer. According to James Altucher, ""There's $200 billion in cryptocurrencies out there and over $200 trillion in demand for money". When the CME begins trading on Dec. 18th, bitcoin will become a player in the $20 trillion daily futures markets. ALtucher predicts bitcoin will eventually exceed $1 million in value.

Maybe-Money

Imagine how many investors meet that description, and are just sitting on the sidelines, waiting for the green light.  As of December 18th, all that scared maybe-money, is about to get into the game.

Too Legit To Quit

Scandals, hacks, bans, forks and scathing vitriol have all dragged the price of bitcoin down and magnified the din of bubble-talk, but bitcoin has proven itself too legit to quit, bouncing back even stronger after every negative turn.

December 18th will be a watershed for bitcoin, giving it the legitimacy it has struggled so hard to attain, when it begins trading on the Chicago Merc, the largest most respected derivatives exchange in the world.

Bitcoin futures will start trading on Dec. 18th and - Kaboom! - bitcoin will suddenly be connected to the global economy and the $20-trillion daily liquidity of the futures markets, drawing a tsunami of cash into cryptocurrencies.

Bitcoin futures will start trading on Dec. 18th and - Kaboom! - bitcoin will suddenly be connected to the global economy and the $20-trillion daily liquidity of the futures markets, drawing a tsunami of cash into cryptocurrencies.

From The Shadows

It is extremely rare for any asset to have to dig itself out of such a deep hole of universally negative PR.  Bitcoin has, almost overnight, emerged from the shadows of the dark web to become a beacon of optimism and hope that a revolutionary new math-based technology can replace an antiquated obsolete one in which a few corrupt individuals control the entire world economy.

Liquidity Up The Wazoo

Lack of legitimacy is just one of the reasons why traditional investment portfolios have not included cryptocurrencies.  The other reason is liquidity.  To institutional investors, the ability to enter and exit the market quickly, at a good price, without affecting the market too much, is crucial for an investment to even be considered as part of a portfolio.

They're all selling?  Then BUY, BUY, BUY!  They're all buying?  Then SELL, SELL, SELL!

$20,000 Christmas? When the coming tsunami of cash hits bitcoin, the price of the cryptocurrency juggernaut is likely to begin jumping by the thousands, with a $20,000 Christmas a real possibility. 

Orders of Magnitude Greater

When futures contracts start trading, bitcoin will be connected to the global economy, and the $20-trillion-a-day futures markets, giving it a level of liquidity orders of magnitude greater than any it has ever had on individual exchanges.

The mainstreaming of bitcoin, along with its new global liquidity, will bring a tsunami of cash not only to bitcoin, but to the cryptocurrency markets in general.

Nothing Normal

There's nothing normal about cryptocurrency markets.  With normal assets, people start talking about a "bear market" on a 20% decline.  Bitcoin can swing 20% in either direction in a day or two, and barely elicit a yawn.

The problem with bubble-talkers is that they only compare price of an asset to where it came from, not where it's going.  So although bitcoins percentage gains may be comparable to the Dutch tulip bulb mania or the dot-com craze, it's market cap is only a tiny fraction of dot-com stocks and even a smaller fraction of the global currency markets in which it will becoma a player on Dec. 18th when bitcoin futures start trading at the Merc. chart:convoyinvestments.com.

Bubble Misconception - Bitcoin's giant move upward has barely begun.  The problem with bubble-talk is that it only measures percentage gains against an asset's own price.  So instead of comparing the price of an asset to where it came from, let's look at where it's headed. Although bitcoin's percentage gains may be comparable to the Dutch tulip bulb mania or the dot-com craze, its market cap is only a tiny fraction of dot-com stocks and even a smaller fraction of the global currency markets, in which it will become a player on Dec. 18th when bitcoin futures start trading at the Merc.  chart:convoyinvestments.com.

$20,000 Christmas?

When the coming tsunami of cash hits bitcoin, the price of the cryptocurrency juggernaut is likely to begin jumping by the thousands, with a $20,000 Christmas a real possibility. 

Jumping By Thousands

We will look back nostalgically at a time when we used to talk about the price of bitcoin in hundreds - 68, 74, 87, etc. - now we're starting to talk thousands , 11, 13, 15 ...  Not to mention the fact that the cryptocurrency juggernaut which emerged from the shadows of the dark web is now bigger than McDonalds, Paypal, IBM, Boeing, Disney, GE, Bill Gates, Warren Buffett, and the economies of 135 countries including New Zealand.

One million dollars.  When bitcoin becomes a player in the global currency markets, it will look like $10,000 was barely the beginning.

One Million Dollars. When bitcoin becomes a player in the global currency markets, it will look like $10,000 was barely the beginning.

The Bubble Misconception

The common misconception perpetuated by all the bubble-talkers is that a bubble is only measured by the percentage gains against its own price.  Certainly in this regard bitcoin could be called a bubble comparable to the Dutch tulip bulb mania and even bigger than the dot-com craze of the 1990s.

But when compared to total market capitalization, bitcoin is a tiny fraction of the value of all the dot-com stocks, and in the global currency markets it's nothing but a tiny guppy in an ocean of untapped liquidity.

According famed tech investor James Altucher, bitcoin's giant move upward is far from over.

99.9% Left To Conquer

"There's $200 billion in cryptocurrencies out there and over $200 trillion in demand for money" - so there remains about 99.9% of the global financial system yet to conquer.

Altucher sees the looming collapse of a single fiat currency, like Venezuela's Bolivar, as the trigger that could drive bitcoin to $50,000, and he predicts that bitcoin will eventually surpass $1,000,000.

the neuroscience of bitcoin is written in the waves: investor psychology, which dominates all other fundamentals, can be demonstrated in the chart patterns that we have been analyzing on this blog.  mathematical formulas based on human behavior allow us to identify highly predictable and extremely powerful fibonacci wave patterns with almost pinball-like bounce points in specific, well-defined target zones. throughout the long term uptrend that started on sept. 15th at $2975, the mathematically predictable series of advancing waves carried powerful momentum while the fibonacci retracement zones provided almost pinball-like bounces after each retracement. chart: coinigy.com, technical analysis: digitalassetuniversity.com

Scandals, hacks, bans, forks and scathing vitriol have all dragged the price of bitcoin down and magnified the din of bubble-talk, but bitcoin has proven itself too legit to quit, bouncing back even stronger after every negative turn. throughout the long term uptrend that started on sept. 15th at $2975, the mathematically predictable series of advancing waves carried powerful momentum while the fibonacci retracement zones provided pinball-like bounces after each pullback. chart: coinigy.com, technical analysis: digitalassetuniversity.com

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