Crypto

Why calling a bottom for bitcoin, or any cryptocurrency, is so misleading

Published

3 years ago

June 21, 2022

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.

How the crypto crash uncovered the sector’s lies – and left retail buyers within the lurch

Celsius Community ‘will take time’ to revive transactions, as a number of U.S. states launch investigations into crypto agency amid business tailspin

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.

Your time is efficacious. Have the High Enterprise Headlines publication conveniently delivered to your inbox within the morning or night. Join at the moment.

Click to comment

Crypto

Blockchain Revolution: How Cryptocurrency is Transforming Global Logistics – theafricalogistics.com

Published

4 hours ago

December 22, 2024

Press Room

Blockchain Revolution: How Cryptocurrency is Transforming Global Logistics – theafricalogistics.com

– Advertisement –

The global logistics industry is undergoing a seismic shift, driven by the integration of blockchain technology and cryptocurrency.

These innovations promise to enhance transparency, efficiency, and security across the supply chain. From tracking shipments to streamlining cross-border payments, the synergy between blockchain and cryptocurrency is setting new benchmarks for the logistics sector.

1. Blockchain’s Role in Logistics

Blockchain technology, essentially a decentralized ledger system, enables secure and transparent recording of transactions. For logistics, this translates into the ability to track goods in real-time, authenticate the origin of products, and mitigate fraud. Key benefits include:

Enhanced Traceability: Every transaction, from the manufacturing stage to delivery, is recorded on an immutable ledger. This ensures that stakeholders have a comprehensive view of the supply chain.
Reduced Paperwork: By digitizing documents such as bills of lading and certificates of origin, blockchain eliminates the inefficiencies of manual processes.
Improved Trust: Smart contracts, self-executing agreements coded on the blockchain, reduce disputes and enhance trust between parties.

2. Cryptocurrency in Cross-Border Transactions

Traditional cross-border payments in logistics are often marred by high fees, long processing times, and currency exchange risks. Cryptocurrencies, like Bitcoin and stablecoins, are addressing these challenges by:

Lowering Transaction Costs: Cryptocurrency transactions bypass intermediaries, significantly reducing fees.
Speeding Up Payments: Transactions settle in minutes, eliminating delays common with traditional banking systems.
Enhancing Financial Inclusion: For businesses in emerging markets, cryptocurrencies provide access to global trade without reliance on conventional banking infrastructure.

3. Use Cases Transforming the Sector

Several real-world applications highlight the impact of blockchain and cryptocurrency in logistics:

Walmart’s Blockchain Initiative: Walmart leverages blockchain to track the origin of produce, ensuring food safety and traceability within its supply chain.
Maersk’s TradeLens Platform: Developed in collaboration with IBM, TradeLens uses blockchain to digitize and streamline global shipping documentation, reducing inefficiencies.
Cryptocurrency-Powered Freight Payments: Startups like Slync.io enable shippers to pay carriers using digital currencies, enhancing payment speed and reliability.

4. Challenges to Adoption

Despite its potential, the adoption of blockchain and cryptocurrency in logistics is not without hurdles:

Regulatory Ambiguities: The legal status of cryptocurrencies varies across countries, complicating implementation.
Scalability Concerns: Processing thousands of transactions per second remains a challenge for blockchain networks.
Skill Gaps: The logistics workforce often lacks the technical expertise to deploy and manage blockchain systems.

5. The Road Ahead

The integration of blockchain and cryptocurrency in logistics is still in its nascent stages but holds immense promise.

Industry players are investing in pilot projects to explore scalability and operational viability. The convergence of these technologies with artificial intelligence and IoT will further revolutionize the sector, enabling predictive analytics, autonomous supply chains, and more.

Conclusion

Blockchain and cryptocurrency are not just buzzwords but transformative tools reshaping the logistics landscape.

By fostering transparency, reducing costs, and expediting processes, these technologies are addressing long-standing inefficiencies in the supply chain.

As adoption accelerates, businesses that embrace this revolution stand to gain a significant competitive edge in an increasingly digital and globalized economy.

Also Read

How cryptocurrency works: A step by step guide

Exploring the potential use cases of Pi Coins post-launch

– Advertisement –

Crypto

My Top Cryptocurrency to Buy Right Now (Hint: It's Not Bitcoin) | The Motley Fool

Published

11 hours ago

December 22, 2024

Press Room

My Top Cryptocurrency to Buy Right Now (Hint: It's Not Bitcoin) | The Motley Fool

The performance of Bitcoin (BTC -0.53%) this year has been nothing short of extraordinary. It’s now up about 46% since the election on Nov. 5, and 146% year to date. Best of all, Bitcoin recently broke through the $100,000 price level to hit another all-time high just north of $108,000.

But what if I told you that there is another top cryptocurrency that is up more than 120% since the election, and 430% year to date? And that this cryptocurrency also just set a new all-time high? That cryptocurrency is Sui (SUI -3.69%), which now ranks 14th among all cryptocurrencies with a $13 billion market cap.

What is Sui and why haven’t I heard of it before?

If you’ve never heard of Sui, that’s understandable. The cryptocurrency only launched in May 2023, just as the market was emerging from the crypto winter of 2022. So, in many ways, its launch flew under the radar of investors. There were bigger issues to consider. The industry was still coping with the aftermath of the collapse and scandal of crypto exchange FTX in November 2022, and nobody was very interested in hearing about another new cryptocurrency launch.

But fast-forward to August 2024. That’s when 21Shares — the company that partnered with Cathie Wood’s Ark Invest on the launch of spot exchange-traded funds (ETFs) for Bitcoin and Ethereum (ETH -0.79%) — released a research report on Sui, detailing all of its unique characteristics. For example, it described how a new technical upgrade suddenly made Sui faster than any other top blockchain by a substantial margin. It pointed out how Sui was rapidly growing in terms of total value locked (TVL), which is a key metric showing the relative strength of a particular blockchain.

Image source: Getty Images.

The title of the report (“Is Sui a Solana (SOL -0.00%) Killer?”) was very provocative, at least for crypto investors. It suggested that Sui had the technological chops to take on Solana, which now ranks as the fifth-largest cryptocurrency. For several years now, Solana has been positioned as the next Ethereum, so Sui being tabbed as a potential Solana killer is a big deal. In fact, 21Shares suggested that there might be a $68 billion market opportunity for Sui if it was able to take on Solana and win.

How high can Sui go in 2025?

My primary concern right now with Sui is that it may be overheating. Just like Bitcoin, it is smashing through all-time high after all-time high. Right now, Sui is trading at about $4.50 after briefly testing the $5 price level. From the perspective of crypto traders, $5 presents the same psychological price barrier for Sui that $100,000 did for Bitcoin. It took Bitcoin a while to break through the $100,000 level, so Sui may not be able to break through the $5 price level by the end of this year.

But, in 2025, watch out. Just take a look at this comparison chart of Bitcoin and Sui since the presidential election. That leads me to think that the market is very bullish on Sui’s prospects under the Trump administration.

Bitcoin / U.S. dollar chart by TradingView

Moreover, consider the trading volume that Sui is now seeing on Coinbase Global (COIN 1.75%). Sui has become one of the 10 most popular cryptocurrencies on the platform in terms of 24-hour trading activity. Granted, the trading volume in Sui is nowhere near that of Bitcoin or Ethereum. But there’s more activity in Sui than in popular cryptocurrencies such as Chainlink, Litecoin, Cardano, Shiba Inu, and Avalanche.

Best of all, Sui has a major new product launch coming in 2025. It’s a $599 handheld gaming device that is currently available for pre-order online. If that product launch is a success, then it could be off to the races for Sui. It could easily double in price to hit the $10 price level.

This cryptocurrency could soar even higher if it ever realizes its full potential as the next Ethereum. Imagine if you had invested in Ethereum just 18 months after its launch. Most likely, you’d be a crypto millionaire by now. In December 2016, Ethereum was trading around $5, which is roughly where Sui is trading right now. Today, Ethereum trades for about $3,400.

That said, I can’t emphasize enough how speculative Sui is. It is still a baby in crypto terms. It has only been around for 18 months, and it can be difficult to get good data and reliable information about it. So, do your due diligence before investing in Sui, and keep your expectations in check. An investment opportunity like Ethereum might only come around once in a lifetime, so it’s asking a lot for it to happen with Sui as well.

Dominic Basulto has positions in Bitcoin, Ethereum, SUI, and Solana. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, Ethereum, SUI, and Solana. The Motley Fool has a disclosure policy.

Crypto

S. Korea, US conducting joint research to block NK cryptocurrency heists

Published

19 hours ago

December 22, 2024

Press Room

S. Korea, US conducting joint research to block NK cryptocurrency heists

A representation of Bitcoin and a price chart are seen in this October 2023 photo illustration. Reuters-Yonhap

South Korea and the United States are conducting joint research to strengthen protection against cryptocurrency heist attempts amid growing concerns of such attacks by North Korea-linked hackers, officials said Sunday.

Based on a recently signed technical annex between the South Korean government and the U.S. Department of Homeland Security, the two sides will jointly develop technologies to prevent cryptocurrency-targeted attacks and to track stolen assets, according to authorities and cybersecurity industry officials.

The science ministry plans to support such research through the Institute of Information & Communications Technology Planning & Evaluation until 2026.

The move comes as the price of bitcoin recently surged to $100,000 after the U.S. presidential election last month, raising concerns of increased attempts by hackers to steal virtual assets.

While the United States collaborates with other countries for cybersecurity research, it is known to have chosen South Korea for research on digital asset tracking technology as North Korea is seen as a key culprit behind cryptocurrency heists.

Under the program, South Korean and U.S. researchers, including those from Korea University and the RAND research institute, will focus on technologies to prevent and track hackers when they steal assets from a cryptocurrency exchange.

They will also focus on understanding how they convert or launder other financial assets they obtain into virtual assets through illegal ransomeware or other methods.

North Korea is known as a major player in cryptocurrency heists, with hackers linked to the country estimated to have stolen $1.34 billion worth of cryptocurrency across 47 incidents this year, according to Chainalysis, a blockchain analysis firm. (Yonhap)