Crypto
Why calling a bottom for bitcoin, or any cryptocurrency, is so misleading
/cloudfront-us-east-1.images.arcpublishing.com/tgam/NTM6XKLUWRMXZKRSZCV7AWSH4Q.JPG "Why calling a bottom for bitcoin, or any cryptocurrency, is so misleading")
Bitcoin BT*1 bulls have at all times been exuberant – that’s desk stakes in crypto land. However currently their enthusiasm has morphed into one thing much more fanatical. It’s one factor to hype a market that’s making individuals wealthy, and one other factor solely to scream about its superiority whereas buyers are getting hosed.
To their credit score, the latest hype does look somewhat completely different. It isn’t plagued by rocket-ship emojis any extra, which used to represent the crypto sector’s astronomical progress. The purpose now’s to revive confidence by calling a backside for the market’s ferocious downturn.
Bitcoin and ether, the 2 hottest cryptocurrencies, have tumbled in waves since November, and each time a brand new swell hits, the believers swear this one will set a flooring.
“Seems like now we have hit max ache and uncertainty within the crypto market,” Barry Silbert, the founding father of Digital Forex Group, wrote final week on Twitter, which serves as a public message board for the sector. “We’re shopping for BTC right here,” he tweeted, utilizing bitcoin’s image. “Let’s go!”
These may be comforting phrases for anybody making an attempt to make sense of the downturn, notably so for unsophisticated retail buyers. However the reality is it’s almost unattainable to name a backside. Anybody suggesting a flooring has fashioned is delivering advertising and marketing strains moderately than any actual evaluation.
This isn’t one thing particular to the crypto sector. Analysts and buyers have tried to name bottoms for shares for a lot of a long time. There may be a complete business of technical analysts, generally referred to “chartists,” who make fancy graphs that attempt to present when the market is about to show.
However for crypto the duty is so difficult that’s there’s arguably no level in making an attempt. The sector is so younger that there are hardly any established norms.
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Whereas the inventory market is susceptible to bouts of exuberance, there are no less than methods to measure its levels of insanity. The value-to-earnings ratio, or P/E, could also be too blunt of a device to make day-to-day buying and selling selections, however it’s invaluable for an information set that spans a long time. Over time now we have realized that shares valued at greater than 15 occasions their earnings may be thought of costly, and something buying and selling under that stage is reasonable – although some industries have their very own idiosyncrasies.
The psychological position such benchmarks play is usually undervalued, as a result of the behavioural-finance area, which helps to clarify why people make such irrational selections, remains to be in its infancy. However the analysis is compelling sufficient to know that these markers are essential when panic units in, as a result of they supply buyers with a map of kinds.
The crypto sector, in the meantime, has but to endure a full enterprise cycle. And whereas bitcoin was created in 2009, so it has technically been round for greater than a decade, it by no means actually went mainstream till the pandemic hit. Meaning the business exploded in reputation in an period rife with monetary anomalies – ultra-low rates of interest arguably being the obvious.
Till lately, it was defensible to attract some conclusions primarily based on bitcoin’s earlier buying and selling patterns, however any credibility for this argument disappeared when the speed hikes began. The crypto sector has by no means endured rising charges – and this cycle received’t be short-lived, so there is no such thing as a holding out hope for a fast price reversal within the close to future. U.S. Federal Reserve governors have been making it clear that killing inflation issues greater than anything on their agenda, even when which means beginning a recession.
Issue within the affect of leverage within the crypto sector, and calling a backside will get exponentially tougher. Final yr, Michael Saylor, one of the vital outlandish bitcoin lovers, famously instructed remortgaging your home to spend money on the cryptocurrency.
It isn’t simply that debt has been used to spend money on crypto property, which complicates issues now that borrowing prices are rising. There’s additionally virtually no visibility into the place the debt lies, or what has been pledged as collateral.
Some crypto lenders, resembling Celsius Community, have frozen property previously few weeks, and nonetheless nobody actually is aware of why. That uncertainty is troublesome. If bitcoin has been pledged as collateral way over was assumed, it may trigger the sector to spiral downward as a result of so many property shall be tied to one thing that has misplaced 70 per cent of its value in seven months.
After which there’s the looming menace of tighter regulation, which is a close to certainty. Retail buyers acquired caught up within the hype and suffered main losses, and which means extra enforcement, and extra guidelines, are coming as a result of their losses typically present the political capital wanted for a crackdown. Couple this with the truth that among the basic arguments for getting cryptocurrencies, resembling bitcoin serving as a hedge towards inflation, are getting debunked and it is extremely possible there shall be much less demand for crypto on the opposite aspect of this rout.
The crypto sector has lengthy prided itself on being considerably completely different from conventional markets, however there’s an outdated adage that applies to requires market bottoms: By no means catch a falling knife. It’s simply as apt for this nascent sector – and crypto’s knife is especially sharp.
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Crypto
Malign interference and cryptocurrency: A new frontier in disinformation and national security
This content was written by Chainalysis.
In a world where nearly half the population will participate in national elections in 2024, the stakes for securing democratic processes have never been higher. Disinformation campaigns—especially those funded through crypto—have become a potent tool for states like Russia, China, and North Korea to destabilize democratic institutions, influence public sentiment and erode trust in governance. Chainalysis’ Malign Interference and Cryptocurrency report sheds light on the pivotal role of crypto tracing in identifying and countering these threats.
In spite of their pseudonymity, the transparency of the blockchain provides investigators a powerful tool to investigate how malign actors abuse cryptocurrency. Each transaction leaves a permanent, traceable record, allowing analysts to connect the financial dots across complex networks of accounts. This traceability was crucial in identifying the funding behind Russian disinformation efforts in recent U.S. elections. The funds used to purchase web domains and social media accounts were traced back to Kremlin-affiliated actors, highlighting crypto’s role in the infrastructure of disinformation.
Sanctions are among the most effective countermeasures against malign actors using crypto for disinformation. For example, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has sanctioned multiple crypto addresses associated with Russian disinformation entities. These sanctions disrupt financing and make it difficult for actors to raise, transfer, and off-ramp their funds. However, these actors adapt quickly, finding new means of funneling funds and evading detection.
Looking ahead, as AI amplifies the reach and sophistication of disinformation, crypto tracing must continue to evolve. The ongoing development of blockchain analytics tools promises to meet the challenge of tracing disinformation funding in a world where deepfakes, bots, and AI-generated profiles are becoming the norm. The findings from the Malign Interference and Crypto report underscore the importance of collaboration across the public sector, private companies, and international organizations to safeguard democracies from crypto-fueled disinformation threats.
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Crypto
Cryptocurrency prices on November 4: Bitcoin trades near $69,000 ahead of US election and as Fed rate cut looms
Major tokens like Bitcoin, Ethereum, Dogecoin, Tron, and Toncoin saw gains, while others such as BNB, Cardano, Shiba Inu, Chainlink, Polkadot, Litecoin, Uniswap, and NEAR Protocol experienced losses of up to 3%.
At 12:02 pm IST, Bitcoin (BTC) traded 0.84% higher at $69,014, while Ethereum rose by 0.9% to $2,472. Despite these individual gains, the global cryptocurrency market cap declined by 1.68% over the past 24 hours to roughly $2.25 trillion.
Crypto Tracker
“Bitcoin is facing resistance at $69,000 after last week’s gains. We expect high volatility this week, driven by the US presidential election and the Fed’s policy meeting,” said Vikram Subburaj, CEO of Giottus Crypto Platform. “A rally above $72,000 could be likely if Trump secures a victory, while support remains strong at $66,000 if a drop occurs.”Edul Patel, CEO of Mudrex, said, “With just one day remaining before the U.S. presidential election, the crypto market is closely watching for the outcome. Bitcoin, currently trading at $69,000, has declined by over 4% over the weekend as investors adopt a cautious approach. Although technical charts suggest momentum is building, investors’ reaction to the election outcome is expected to be the key driver of BTC’s price action. Bitcoin faces resistance at $70,900, with support at the $67,400 level.”
The volume of all stablecoins is now $65.12 billion, which is 93.44% of the total crypto market 24-hour volume, as per data available on CoinMarketCap.In the last 24 hours, the market cap of Bitcoin, the world’s largest cryptocurrency, increased to $1.363 trillion. Bitcoin’s dominance is currently 60.63%, according to CoinMarketCap. BTC volume in the last 24 hours surged 42.64% to $33.44 billion.
Tech view by ZebPay Trade Desk
Earlier this week, Bitcoin’s pullback near its all-time high may have prompted short-term traders to lock in profits. Despite the price retreating to around $68,000, analysts remain optimistic, expecting Bitcoin to find solid support within the $65,000 to $68,000 range. The upcoming U.S. elections are the next significant catalyst for the crypto markets. A break above $70,000 in the near term could lift investor sentiment, driving renewed buying interest in select altcoins as well.
ETMarkets.comBTC after making the all-time high of $73,777 was trading in the ‘Descending Channel’ pattern. The asset gave a breakout above the channel and rallied up to $73,620. However, the bulls failed to cross the previous all-time and the prices witnessed some profit booking. BTC has struggled to give a weekly closing above the $70k mark in the past and this time also it failed to do that. Once it gives a weekly close above $70,000 and sustains above the previous all-time high then we may expect it to rally further.
Key Levels for BTC:
Support 1: $66,500
Support 2: $62,000
Resistance 1: $70,000
Resistance 2: $73,777
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times.)
Former President Donald Trump announced the launch of a new cryptocurrency exchange World Liberty Financial where people can buy, sell and trade digital currencies like Bitcoin. Now the exchange has also taken the next big step of issuing its very own cryptocurrency: WLFI.
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Because Trump’s name is attached, this new digital coin is drawing a lot of attention. But should you put your own money in? We spoke to two experts who gave us their take.
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Any financial advisor will tell you to put your money in an asset that has a proven record of stability and growth. Trump’s cryptocurrency is brand new and doesn’t have any history to back it up. Just because it has a familiar name attached to it, that doesn’t mean it will perform well.
“The best things that you can invest in are things that you understand, and that have a proven track record of success,” said Joe Schmitz, Jr., founder and CEO of Peak Retirement Planning. “You should not invest in things because people are speculating that it could make it big.”
Crypto has made huge gains for some, but it’s also caused huge losses, too. Some people do make a lot of money in crypto. But what worked for one person doesn’t guarantee that the same thing will work for you. If you’re considering putting money into Trump’s crypto, remember that there’s no way to know whether any new cryptocurrency will perform well.
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World Liberty Financial announced that their currency, WLFI, will become a stablecoin. That means that, theoretically at least, its value will be locked one-to-one with the U.S. dollar. This is supposed to keep the extreme price swings of regular cryptocurrencies from happening. But there are still big risks. A stablecoin relies on World Liberty Financial to keep its value. You have to trust that World Liberty Financial has enough cash reserves to back up every coin they issue.
“I do not advise putting money into Trump’s crypto or any other cryptocurrency,” said Thomas J. Brock, of RetireGuide.com. “Cryptocurrency is a highly speculative asset; it is not a prudent investment. Cryptocurrency does not yield any income, and it has no intrinsic economic value. The only way you can make money with cryptocurrency is if you can sell it to someone at a higher price than what you paid. Unfortunately, given cryptocurrency’s incredibly volatile nature, properly timing a purchase and sale is hard to do.”
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