All in Blockchain

In October 2018, cryptocurrencies are in the doldrums and waiting for a catalyst.

It’s estimated that 49% of Central Asia and Eastern Europe, 59% of South East Asia, 65% of Latin America, 67% of the Middle East, and 80% of Sub-Saharan Africa are unbanked.

Or put another way 2.5 billion people are without basic banking services.

One possible catalyst and the propellant for blockchain technology along stage four of the hype cycle, (the slope of enlightenment), is decentralised exchanges that serve this market.

Blockchain technology: Is there a secret sauce?

Most people don’t know or care how their television works. All they care about is the on/off and channel buttons. Most don’t understand how their car works, or how a synchromesh stick shift gearbox magically gets them five blocks away from home without even thinking about it.

Understanding how Cardano’s proof of stake algorithm, Ouroboros, works is one thing. But using this knowledge to benefit from investing in ADA is quite another.

Short term pump or real trend? — Cryptocurrency metrics that matter.

The 5% club understand the most important variables the financial world uses to figure out the likelihood of money flowing into or out of an asset class.

One of the variables to be considered is the opportunity cost — aka the discount rate. Knowing the discount rate is the key to unlocking intrinsic value. And if the 5% have an estimate of the intrinsic value, they can compare it to the asking price.

The bottlenecks behind blockchain security

The 95% are controlled by their emotions. When a word like anarchy is used, it causes a lot of discomfort to the 95% because they use the best heuristic to make sense of the information. Anarchy is an example of an abstract word. It gives the appearance of explaining everything, yet it explains nothing.

In political science, anarchy is a word, when used in international relations, describing any possible state between order and chaos.

So, what has sovereignty got to do with cryptocurrencies?

As Bitcoin goes under the hammer, is a major change in the cryptocurrency markets taking place?

The cryptocurrency markets got beat up this week, with pundits blaming the drop on the Bitcoin Cash hard fork and everything in between. The 5%, the most consistent investors and speculators, don’t listen to the news, preferring instead to build up their picture of what’s going on, analysing direct market feedback for evidence of shifts in supply and demand.

After a large percentage move down, the 5% are looking for a missing component, the trait that shows up at lows and is absent at highs. Fear.

Crowd behaviour at highs and lows and what the 5% do instead when trading Crypto

The term “bubble” is used anytime an asset’s price is driven, by speculation, far away from its intrinsic value.

In the last twenty years, we’ve had an unprecedented number of bubbles. Tech stocks in 2000. Real estate in 2006, Debt in 2007, Bonds in 2013 and Bitcoin in 2017.

Maybe it’s a new technology or a more efficient service, perhaps it’s a scheme where, if successful, it could change your life, but whatever it is, and whatever it does, the behaviour is always the same.

Indicator settings don’t influence trend direction

Trends, like the planets moving around the Sun, don’t work the way the majority of market participants think they do. There is an unlimited number of ways trends can be traded. The 95% believe the only way to trade a market is by taking a directional position.

While the 95% obsess over indicators and which settings work best, the 5% focus their attention on the interaction of supply and demand and the accompanying levels of fear.

Are cryptocurrencies immune from the Power Law?

The majority of market participants spend their time reading about how the latest and greatest upgrade to an existing blockchain is going to change the game, or they read the opinions of cryptocurrency gurus, following them on social media, reading the tweets and posts for the one thing they are looking for. Certainty.

Unfortunately, certainty does not exist in any market, including the cryptocurrency space. In financial markets, venture capital, and macro economics, there is one law to rule them all.

Crypto trading: The majority look in the wrong place. They get in late, and out early.

The inconvenient truth: Most people new to the world of speculation and trading start defining trends with indicators and signals from the past. They don’t take the time to learn why trends begin, how trends move through time, and how they end.

Technical analysis is often used to show how easy it is to be successful in hindsight; however, the reality, for most, is different when they attempt to use a TA system in real time.

Not understanding background conditions is like walking across a freeway blindfolded.

The inconvenient truth: Most people new to the world of speculation and trading start defining trends with indicators and signals from the past. They don’t take the time to learn why trends begin, how trends move through time, and how they end.

Technical analysis is often used to show how easy it is to be successful in hindsight; however, the reality, for most, is different when they attempt to use a TA system in real time.