In the savings and loan crisis of the 1980s, over 1,000 of the 3,200 savings and loan institutions in the United States failed in rapid succession. The FSLIC almost immediately became insolvent itself, and had to be recapitalized several times with over $25 billion dollars of taxpayer money. Even this didn’t even come close to being sufficient to solve the crisis, and the FSLIC managed to only resolve the failure of less than 300 of the 1000 bankrupt institutions, even with all the handouts from taxpayers, before it just flat out gave up and dissolved itself.
For instance, if two parties decide to make a bet on Donald Trump winning the election, historically, this could only be done by either word of honor or by some ad hoc legal contract. For a say, small $100 bet, it would be absolutely a non-starter to pursue legal action in the case that one of the parties decided to renege on the deal in the aftermath of the election. Normally, the reneged-upon party would simply be left in the dust without recourse.
The same growth trajectory is how I see bitcoin, cryptocurrency, and blockchain technology at large playing out. If all goes well — and there’s no guarantee it might, everything indeed might fail and all our hopes and dreams might gang aft agley — there’s no reason at all that bitcoin can’t one day surpass even our wildest imaginations today, just like the internet did before it, and fundamentally rewrite the script for how we interact with money and the world as a whole.
A stop-loss is triggered once the price of an asset hits your determined lowest price. When it’s triggered, the stop-loss will automatically sell for the next available price. For example, you bought Lisk at $14 and its value is $32 now. You want to realize your profits, but you’re not quite sure if the mania has cooled down yet. You set your stop-loss at $30 and go to bed. When you wake up, Lisk is at $27, but your stop-loss sold it just a little below $30.
Monero (10%) – Monero is similar to Bitcoin in that it allows value exchange. However, Monero differs from Bitcoin in that it is focused on providing greater privacy to those that utilize their blockchain, using their stealth address mechanism. Anonymity is likely to become more and more important in a world where Bitcoin addresses can be traced. As more regulation starts entering the cryptocurrency space, an increasing number of individuals will gravitate towards privacy coins such as Monero, Zcash and Dash, that can mask their transaction activities.
*An accredited investor, in the context of a natural person, includes anyone who either earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR, has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
That’s the case as I see it for bitcoin. In the case of most altcoins, however, I don’t see remotely enough to even begin to justify the possibility of long term gain in the first place. Even with speculations, or perhaps especially with speculations, it’s incredibly important to thoroughly analyze a given investment opportunity for at least the potential for long term gain and success, and assess the magnitude of that possible gain, and then to weigh that potential versus the likelihood of outright failure of the speculation. With most altcoins, their value over bitcoin or ethereum is far from clear, and generally superficial or minor at best.
Bitcoin (BTC) has been engaged in a predictable up and down pattern where it absolutely crashes at the beginning of any year and then sky-rockets as the year nears its end. Bitcoin held steady at around $19,000 in December 2017, and then sure enough – crashed big time to around $6,000 at the beginning of 2018. At the time of writing, March 8th 2018, the price of Bitcoin is relatively stable between $10,000 and $12,000. In my opinion, the price will run again soon.
Transaction volume: in order to determine whether a cryptocurrency is actually being used, you can take a look at its transaction volume. In the case of Ethereum, its transaction volume per day is about 500,000 ETH. Historically, this is a number that is increasing and as long as this upward trend continues this reaffirms the long-term viability of holding Ethereum in our portfolio.
There are two ways to balance your portfolio. You can create a balance based on several individual cryptocurrencies or you can balance your portfolio based on the types of cryptocurrencies. I’m actually doing both. I first created a balance based on the types of cryptocurrencies, then I created another balance of the cryptocurrencies within each of the types of cryptocurrencies.
If the analysis shows that you can take bigger risks, then crypto trading may be for you. Should you decide to enter the crypto market, you will need to choose the exchanges to trade on. There are currently almost 200 cryptocoin exchanges, so you will need to conduct additional research to pick the best option. Usually, traders analyze commission, overall reliability, jurisdiction, and financial stability of the trading platform.
The US hasn’t been immune to these crises, either. The US began its foray into fiat currency with the issuance of Continental Currency in 1775. Just three years later, Continental Currency was worth less than 20% of its original value. 13 years later, hyperinflation entirely collapsed the currency, and the US had to pass a law guaranteeing that all future currencies would be backed by gold and silver, and that no unbacked currencies could be issued by any state.
The emergence of Bitcoin has sparked a debate about its future and that of other cryptocurrencies. Despite Bitcoin’s recent issues, its success since its 2009 launch has inspired the creation of alternative cryptocurrencies such as Litecoin, Ripple and MintChip. A cryptocurrency that aspires to become part of the mainstream financial system would have to satisfy very divergent criteria. While that possibility looks remote, there is little doubt that Bitcoin’s success or failure in dealing with the challenges it faces may determine the fortunes of other cryptocurrencies in the years ahead.
This fast has brought so much attention to altcoins, and it’s coming to be that a coin will go up in value simply because it’s on the market. So many new investors want to get in on the ground level, so they’ll pump impressive funds into initial coin offerings (ICOs) with the hopes of literally getting rich overnight. For many investors, this actually comes true. A coin will take off after releasing to the public and early investors are rewarded greatly.
When too many people pump and dump these coins over and over, they lose their power. For example, if a coin goes up and down so much, then fewer investors are likely to hop on board once it starts to go up again. They might think, “This coin goes up, but it always comes down. I’m not going to risk it by investing.” This is actually harmful to a coin when it skyrockets and crashes, and this is why you should be wary in 2018 where you put your money.
It is important to note that the use of Zcash is not just for cybercriminals who engage in illegal transactions in the dark web. There are a number of legitimate reasons why a user would opt for anonymous cryptocurrencies such as Zcash, including a couple who are into eye-brow raising bedroom toys; an entity who would like legal services for a private matter like bankruptcy; a company who would like to protect its trade secrets or supply chain information from competitors; an individual with a chronic medical condition who would like to buy his pills online anonymously; etc. These are all examples of individuals seeking anonymity for privacy reasons.
No. 4: Cryptocurrency futures, derivatives, and forward contracts are gaining adoption: The volatility of crypto prices at the beginning of the year dramatically boosted demand for crypto derivative products. With derivatives, investors do not need to hold the underlying crypto asset, but they can still enjoy the potential benefits while possibly minimizing loses, much like they hedge regular currencies. While many exchanges do not yet allow direct sales of Bitcoin, investors can speculate on cryptocurrency pricing by trading futures on exchanges like BitMEX, LedgerX and OKCoin. Institutional investors have used futures contracts to even influence crypto currency prices, especially BTC. In the United States, the move by the Chicago Mercantile Exchange and Chicago Board of Exchange to offer futures trading has further validated the industry.