Author Topic: First take  (Read 299 times)

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Offline Rudi Jan

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First take
« on: January 18, 2018, 10:09:32 AM »
First take

January 18, 2018
source: self




I confess that I am new to the altcoin market. My focus for some while has been on the values of the dollar, metals, bonds and the equity markets, analyzing and researching political and economic activity and a wide range of commentary and analysis on such matters. However, having watched the advent of crypto currency since their inception, it is clear that they are not about to go away and could prove to provide us all with insurance and profit in a very unnatural market.

For some while now metals have remained flat. The dollar continues a precipitous decline (over 10%) since the beginning of last year. Bonds are selling off daily. The rates on 10 year bonds are flattening relative to 30 year bonds. The gap in the price/earnings ratio of a hyperbolic equity market widens each quarter.

None of this is natural. The evidence is overwhelming that the GDP, the employment rate, the inflation rate and every other indicator used by the central bank are manipulated. Naked short selling, the plunge protection antics, crooked accounting and junk assets, understated liabilities and a growing debt, both public and personal, student loans... 'bubble, bubble, toil and trouble'.

As bitcoin broke 20k when I started to focus on the altcoin market I thought it better to refrain from putting in an order. Buy the dips. In this case that dip was 50%. The financial pundits are thrilled to tell everyone invested in bitcoins that they have lost half heir wealth. They do not tell you that a profit or loss only occurs when there is a sale. Such limited thinking has been repeated andlessly in the metal markets. Goldman or some such, probably the Fed, dump naked shorts on the market and the COMEX drops accordingly. Has not something similar occured on New Year's? The same players do not like bitcoin for two reasons - it is finite and it is not usurious i.e. interest free. To dampen the enthusiasm for altcoins the financiers added futures based on nothing and started buying altcoins. Their buying ran the nominal value of altcoins to new heights. Considering the relatively small percentage of 'capital' represented by altcoins it is relatively easy to throw fiat dollars at the market and overwhelm the small investors. It was noticed by some that bids far outweighed offers which would indicate that the small investor wasn't selling, that the action was in large trades, very likely between the large financial institutions.

This has been going on at the COMEX for years. It is nothing new.

One of the main arguments that has investors concerned is that altcoins have no intrinsic value. In physical terms I would have to agree. However anonyimity and a currency limit are of considerable value. It is rather disingenuous for the bankers to denigrate altcoins on that account when their fiat dollar has an intrinsic value of two cents. The other argument thrown at the public is the instability of altcoins. As I already pointed out - the dollar is down 10%. No instability there I guess. In fact it doesn't even get mention on the lamestream media.

The actions taken by the central bank(s) this past month caused a liquidity crises of sorts at the lower tiers of decimal buyers and sellers. All that has happened is that institutional investors ran up the market and then dumped it. But to who? Certainly not the small investor. So who took in a bunch of bitcoins at losses all the way down to 10,000 USD? I expect it would have been one of their own and such losses, relatively small compared to equities and bonds, are traded as well.

For all the hype altcoins are not going away. Bix Weir declared that the bottom was to be 13,888 but we can see it fell deeper than that and will probably hover up and down around the 11,000 range. Some stability is essential but that should come naturally, not by stealth and legislation. So I will watch the market in the days ahead and step in when the dust settles. In the mean time I'm enjoying the technical world of mining bitcoins and looking deeper at what I think to be the weak link in cryptocurrency - the exchanges.
Suspend all belief. Get the facts ~ Rudi
No one rules if no one obeys ~ Lao Tzu