Kryptonim: Experts expect a new wave of the financial crisis, and the media write about the bursting of the Bitcoin bubble

Experts expect a new wave of the financial crisis, and the media write about the bursting of the Bitcoin bubble. The paradox lies in the fact that the stock and cryptocurrency markets alike are subject to cycles. Bitcoin correction is commonplace, and not a horseman of the Apocalypse.

One of the largest in the history of world financial crises happened in 2008. It was caused by the collapse of the mortgage obligations in the United States. What could cause the next recession? The head of the Federal reserve Janet Yellen (Janet Yellen) believe that the new culprit is corporate debt — again in the United States. Over the past eleven years, the debt increased 4.9 to 9.1 trillion dollars.

The crisis of 2008 inspired a film Studio Paramount the creation of the film “shorting” (The Big Short, 2015). Trading is so arranged that in the fall too, can make money. At a time when the public believes in perpetual growth, when the real estate market recoilless flying to the moon, there are traders who risk all their funds in order to bet on a market collapse.

Compared to traders of the stock market of the middle of the two thousandth, we are in a more advantageous situation, because the correction of Bitcoin — it is far not a unique event. History of Bitcoin knows four market cycle:

1. 2011-12: a 48-week upward trend.

2012: a 22-week downtrend (-93%).

2. 2012-13: 72 weeks uptrend.

2013: 12 weeks downtrend (-80%).

3. 2013: 20 weeks uptrend.

2013-14: 58 weeks downtrend (-86%).

4. 2015-17: 152 weeks uptrend.

2018: 52-week downtrend (-84%).

It is easy to calculate that the average correction of these cycles was about 86%. Thus, the current Bitcoin market cycle shows price reduction that can not be called extreme. It is quite common for major cryptocurrencies.

The study of history is useful because it allows you to predict how deep can drop Bitcoin. In the case that the correction will amount to 86% in 2014, price will fall to $ 2800. Finally, in the limiting case (correction 93%) we have a chance to see Bitcoin at $ 1400, however, it is clear that this is the least likely scenario.

The current century has examples of much more severe drops in local markets. Imagine that in 2013 you impressed by the fact that the power in Venezuela came President Nicolas Maduro. You decided to make an investment and put, say, one million dollars in Venezuelan bolivars. If you are standing, it is best to get: today a million dollars you would still be 37 cents (correction 99,999963%).

The stronger cooling of the cryptocurrency market, the more you hear talk about the fact that the current correction in Bitcoin plays an important role trade outside exchanges. In English-language publications off-exchange trading is commonly referred to by the acronym OTC (Over-The-Counter).

In November 2018, the head of the exchange Binance, Chanpen Zhao (Changpeng Zhao) said that the OTC-market, at least not less than the stock market. If we compare this statement of the head of the largest data website Coinmarketcap about capitalization and daily volume of trade Bitcoins, we can conclude that every day, about the eighth part of all the in circulation bitcoin change for their owners outside the stock exchange.

The OTC gives the opportunity to conduct significant transactions in bitcoin without a significant impact on the exchange rate, however, that exchange rate is a guide for anyone interested in the current state of Affairs. It turns out that this course is not a market, and it may be artificial, due to the collusion behind the scenes, OTC. Shady deals allow you to buy Bitcoin from miners, not obvalivaya its price on the exchange, and at the same time accumulating on the cold wallets huge amounts of cryptocurrency, we need to manipulate the exchange rate. To coordinate these steps allows the mechanism cryptopedia: before every major price movement of the owners of big purses get small transfers of Bitcoin, encoded commands on the sale or purchase

Year ago started trading futures bitcoin. On since then, full correction you could very well earn. It was enough at the peak of prices to bet on a fall and close the deal at the end of 2018. In contrast to the situation in the middle of the two thousandth’s, when the mortgage crisis still seemed unimaginable event, this short would not require a trader impartial thinking and courage. It was enough to wield the levers of OTC trading in Bitcoin.

Experts in the field of trading have the same opinion on how the market will react cryptocurrency to a new financial crisis. They say that many of the investments in the crypt are venture in nature, that is, use the means of external investors. So as soon as there are problems of a global nature, the first sector, where capital will flee, will the cryptocurrency market.

“Future generations will remember the year 2019 as the beginning of an era of new possibilities.” (C) John McAfee

But there is another point of view. The recession of 2008 was the strongest since the great depression, and it led to the creation of Bitcoin in 2009. The coming world crisis will strike first of all on Vietnam currencies — the dollar, Euro, pound, yen — all the money that is not backed by precious metals. All known in the history of mankind Fiat currencies have turned to zero, and they were provided only with confidence in their governments.

Venezuela seeks recovery from hyperinflation in bitcoin El Petro. Many countries will follow the example of Venezuela and will launch its own national currency, minted in the blockchain. Bitcoin will claim the role of a quiet harbour in the world.

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Swiss financial regulator: a risk Factor for the cryptocurrency investment is 800%

Management to oversee the operations of the financial market Switzerland (FINMA) informally signaled that the risk ratio for cryptocurrency investments should amount to 800%. The Agency announced this figure in a letter dated 15 October in response to the Association request EXPERTsuisse, consisting of experts in the field of tax and audit activities.

In his letter to FINMA also said that the relevant legal provisions are not yet valid, therefore, banks and other stakeholders are often required to clarify this issue.

“FINMA recently received many inquiries from banks and securities dealers, which owns positions in cryptocurrency assets, and subject to requirements on capital adequacy, risk allocation and legal regulations on the calculation of ratios short-term liquidity” —quoted by Swissinfo representatives of FINMA.

In Switzerland, for several years there has been a formal integration of cryptocurrency products and banking sector, this European country is trying to create a legal environment that can support the development and operation of new financial instruments. At the same time, until the international Basel Committee on banking supervision develops all acts and laws necessary to regulate this area, FINMA can only give approximate figures.

However, the final decision may be announced at the end of November, when is the next meeting of the Basel Committee. Therefore:

“All scriptactive must assign an overall risk ratio of 800% to cover market and credit risks, regardless of where hold positions in the banking or trading assets,” — said in a letter to FINMA.

According to several sources, comment on the situation, 800% is a big figure, but it is within the allowable range. For example, the startup SEBA, which in September drew 103 million dollars to create cryptocurrency Bank of Switzerland, said:

“This recommendation will have limited impact on its business model. Nice to see that the banks no longer look away from the increased number of clients requiring services associated with cryptocurrencies, and ask for advice and do your own contribution,” said a spokesman for lobby group Bitcoin Association Switzerland.

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The financial regulator of Hong Kong called ICO “blatant fraud”

The Commission on securities and futures of Hong Kong (SFC) has publicly expressed their skepticism about primary offerings of coins (ICO).

Speaking at the event dedicated to the investment industry Julia Leung, Deputy head of the Commission on securities and futures in Hong Kong, has again warned the public about the risks associated with the ICO:

“Although we recognize that innovative technologies such as the Blockchain, have the potential to improve the efficiency of the financial sector, it does not give anyone the right to hold public fundraising, violating the legislation on securities”.

Julia Leung also expressed concern that, despite the loud statements, many of ICO projects in fact may not offer the promised technological innovation, which means big risks for investors:

“Many ICO questionable, if any, are outright fraud. Issuers manage to escape from the scrutiny of the police or securities regulators due to the transboundary nature of their projects, as well as the nature of cryptocurrency”.

Also the head of the SFC commented on the recent closure of one of the local ICO-projects, in which, in the opinion of the regulator, offered in Hong Kong of unregistered securities. Earlier, SFC ordered several cryptocurrency exchanges to delist tokens obtained during the ICO, on the basis of their consideration by the Agency as securities.

In the framework of its activities, the SFC seeks to educate the public about the alleged risk of investing in cryptocurrencies. In January, the Commission on securities and futures of Hong Kong launched a campaign in the media using the underground network of the city, with the aim to ease the growing public interest in investments through ICO.

In his speech Leung explained the popularity of such investments. Based on her statements ICO appealing through the spirit of adventurism among the users:

“Most of those who invest in the ICO understand that tokens have no value, but rely on their fast growth on the secondary market.”

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