• Chris Principe, Publisher at Financial IT


• 21.01.2019 07:15 am
cryptocurrency

As you probably remember, Bitcoin was the big news headlines and the dinner table talk of a year ago. As crypto-currencies soared in value, it was rightly the dominant topic of conversation. Crypto-currencies had advanced in value quite dramatically through the second half of 2017. Bitcoin increased from $1,000 each, to almost $20,000.

This created huge paper profits for buyers who were excited by the continued rise in value. This buying frenzy heated up to a peak never seen in any investment or commodity.

Popular exchanges like Coinbase had to cope with the opening of hundreds of thousands of new accounts during the last few months of 2017.

Mobs of speculators were bidding the price up to new highs daily. This generated huge demands for Bitcoin which has no fundamental value. Bitcoin became a textbook example of a speculative frenzy.

At the end of 2017, the outrageous predictions of Saxo Bank included a fall in the price of Bitcoin to $1,000 by end of 2018. As 2018 unfolded, the price of Bitcoin dropped to under $3,500 even after a period of price stability in the $6,000 to $7,000 range. This was as much unexpected as it was expected!

Indeed, the fall in the price of Bitcoin has the potential to become a self-fulfilling prophecy. Saxo Banks outrageous predictions may yet come to pass. What a difference a year makes!!

CRYPTO TO CRYPT

The hype about Bitcoin - and the concept that it would continue to rise - has played into the hands of the crypto-whales. They have had the chance to cash in with huge profits and buy back at cheaper prices - thus giving them control of more Bitcoins. They now control a large percentage of the available Bitcoins which gives them the ability to influence the market when and at what price they wish. Today, they are at it again, forcing the price down to accumulate Bitcoins at new lows. When the crypto-whales sell, the panic sellers do the same. This causes the price to drop, giving crypto-whales the opportunity to accumulate more at a lower price.

This is classic market manipulation of an asset whose promoters claimed could not be manipulated.

Those who bought at the high point of the market have now taken such big losses that they might as well be buried in a Crypto-Crypt.

Bitcoin now has the title of the biggest financial scam in history. This is making Bernie Madoff’s scam seem minuscule. However, there is one major difference. Bernie bilked people who were already wealthy. The Bitcoin manipulators have hit hardworking people who had emptied their retirement funds and loaded up their credit cards to enhance their family’s lives - and are now suffering terribly.

There are even some of the Bitcoin Faithful who are getting out while they can. With the value of their crypto assets collapsed by 80 percent, they still must service their debts and avoid personal bankruptcy.

Is this the end of Bitcoin and Crypto-currencies? Are we to seal the crypto-crypt and head into history as did Dutch Tulips andPets.com?

There are many worthless coins and tokens that are headed to zero. Many have been set up as scams from the start to take advantage of those hoping for the next crypto "shooting star". These are high-risk companies run by scammers who are great at turning YOUR MONEY and YOUR DREAM into THEIR MONEY and THEIR DREAM.

Bitcoin was the first and biggest crypto-currency by market capitalization. At the same time, it is based on inferior technology compared to the market advances. It is backed by nothing and useful for next to nothing. Bitcoin is clearly doomed to failure. To deem it valuable is senseless.

Many argued that crypto-currencies represented a great technology to improve the financial system. A crypto-currency that serves as a medium of exchange, not controlled by bankers, is a sound concept. It is also a sound concept when online transactions are done at a low cost. This is the revolutionary idea described in the original Satoshi whitepaper a decade ago, which became Bitcoin. A crypto-currency may someday realize this goal.

The greater opportunity is the use of Blockchain, Distributed Ledger Technology (DLT). This will change commerce, finance, and even our lives.

FedCoin, EuroCoin, IMFcoin, UNcoin, eRuble, CADcoin - such things will be created. I can see the adoption of these private systems for tracking and trading other valuable items. Blockchain will prove to be an important tool. History will have people turning back to using real, physical, valuable, anonymous money - GOLD!

OWN A GOLD MINE!

Seriously - Buy a gold mine!

Buy gold, gold coins, gold contracts! History has proven that this is the only store of value that really works. Since 2013, gold production has decreased each year. There has not been a sizable new gold find since 2014. Supply is decreasing but the demand is there. Pricing proves it. Gold mining companies are thrilled when they can recover one gram of gold in one ton of earth.

The bottom line is that gold discoveries are DWINDLING!

All the gold mined in history is about 166,500 tons and is divided into four uses. The biggest is in jewelry which uses 50.5% - not necessarily the best investment, but your significant other will love it. Next is in private investment at 18.7%. Government holdings use 17.4% and industry uses 13.4%.

Gold is extremely rare, impossible to create, easily identifiable, malleable and does not tarnish. Gold has been highly valued throughout history for every tiny gram of weight. People have used it for centuries as a monetary metal, a symbol of wealth and a store of value. Gold is a safe-haven asset. No government or politician can easily confiscate, freeze, nationalize or devalue it at will.

So, when the demand for gold starts to heat up, the supply won't be there. Gold is rare, limited and forever in demand. This will cause the gold price, and potentially silver prices, to soar. It is simply the best way to preserve wealth over the long term.

BUY A GOLD MINE or BE BURIED IN A CRYPTO-CRYPT!