Jump to content

Bitcoin - Digital Gold - Part 1, 2 & 3 by TrendFollower

Recommended Posts

One of the arguments against Bitcoin vs Gold is that Bitcoin is too volatile. This is absolutely correct at this moment in time. Now just imagine if over time Bitcoin loses it volatility and becomes less volatile, this is potentially possible.

If Bitcoin makes a new all time high above $20k then what will those who are negative say? Most probably that it is another second bubble and then a third bubble and a fourth!

Understanding when there is a digital revolution taking place near the beginning and seeing such a large movement in such a short space of time is critical to riding some of the strongest trends. Such trends can last years and those who can spot such opportunities are those who make the biggest gains. 

No one can dispute the fact that over the past ten years Bitcoin is simply one of the greatest performing assets in the world.  It is one of the greatest trends to have materialised over the past decade and from a trading and investing perspective (regardless of whether it is a bubble / junk / garbage or whatever) it has been nothing short of phenomenal. 

 

 

Share this post


Link to post

A US Senator has come out and stated that even if they wanted to ban Bitcoin in the United States they could not.  So it is very likely now that regulation will be coming for Bitcoin et al in the US. It is just a case of when. 

Bahrain Crypto Exchange has received a Central Bank licence in a Middle East first. Does this sound like an asset that is going to go to zero. We know how strict the rules and regulations can be in the Middle East so this is very positive for Bitcoin and Crypto. 

This next article demonstrates to me how seriously the UK are looking at guidance and regulation for Bitcoin and Cryptocurrencies in the UK. 

UK Finance Watchdog Issues Guidance on Regulation for Bitcoin and Crypto Assets

https://www.coindesk.com/uk-financial-watchdog-issues-full-guidance-on-crypto-assets

Now just in this post I have mentioned the US, Middle East and the UK. Does this sound like the three counties are making decisions based on 'Tulip' mania or an asset class that will not exist or an asset like Bitcoin which is going to zero?

 

Share this post


Link to post

The vision is for Bitcoin to be a digital store of value and the foundation on which other Cryptocurrencies are pegged against. Like how the Dollar behaves in FIAT currency, Bitcoin would be similar in the digital universe. This is why Bitcoin will not be a direct competitor to the US Dollar though I accept that it currently is priced and linked to FIAT currency such as the USD. This is necessary at this early stage of the Digital and Crypto revolution. 

If Bitcoin and this is a big if it can establish itself within the Crypto Asset Class as the main currency to which others will be pegged to in the future then it can use the link with the USD Fiat currency to make a bridge between the FIAT Universe and Digital Universe. If in the future you pay for goods and services via Crypto and your salary is paid in Crypto then in many years to come you will not need there to be a bridge and link with FIAT. This is 20 to 30 years away. 

Right now Bitcoin to be linked to the USD is necessary for it to work. There is no other mechanism I can think of. This will only stop if Bitcoin ever becomes a means for exchange of goods and services around the world or it becomes the de facto currency of the Digital universe. 

 

Share this post


Link to post

The UK is stating that Cryptocurrencies like Bitcoin have no 'intrinsic value'. 

In my personal opinion it seems that Bitcoin et al offers an efficient means of payment transfers over the internet and in the digital space. Bitcoin is controlled by a decentralised network. There are clear and transparent rules and it genuinely provides an alternative to FIAT currency which is controlled by central banks. The very alternative is the essence of the 'intrinsic value' of Bitcoin. 

Bitcoin's supply will be confirmed and established in the year 2022. Let us wait for this period and see where Bitcoin is and what its price is before we make bold assertions against it. Just because the UK Government states that it has no intrinsic value does not mean it is true. This is where the media is so powerful in influencing our thoughts and beliefs. Since when have those who understand the complexities of Cryptocurrencies and Blockchain work for the UK Government? The answer is they do not! This is like someone who has never played or watched a football game commenting on the ability of a specific football player. It is like someone commenting on the taste of a cake when they do not know how to make a cake, they have never made a cake and they particularly do not like the taste of cakes. They avoid cakes because they think they are unhealthy. The type of comment this particular person makes will have a form of bias. 

We are three years away from 2022 and I think Bitcoin will either be a lot higher in price and more established or it will have failed by then and crashed to zero. For me I just want to profit from the price action both on the long side and short side regardless of what the end game is. 

Share this post


Link to post

Some are perceiving Bitcoin to be 'insurance' against financial instability.

It may not be the only insurance against financial instability but it could play a role so that there is diversification within this. So for example Gold could play a role. Bitcoin could play a role. Bonds could play a role. 

Share this post


Link to post

Take this article with a pinch of salt but I there is a strong narrative for Bitcoin. It is gaining more attention and investment and institutional demand is increasing.


Bobby Lee: $500K Bitcoin Price ‘Flippening’ of Gold Will Come by 2028

https://cointelegraph.com/news/bobby-lee-500k-bitcoin-price-flippening-of-gold-will-come-by-2028

No one knows what the price of Bitcoin will be tomorrow, next year or in the next decade. The one thing I do know is that Bitcoin has outperformed Gold as not only a store of value but as an asset to increase capital wealth since its inception 10 years ago. 

Share this post


Link to post

What has been interesting recently if that both Gold and Bitcoin have been moving downwards in a similar time period. 

Below is the Gold chart.

1451275404_SpotGold_20191126_07_03.thumb.png.0e67a62aecbbe56b8c0950973d3f915b.png

Now below is the Bitcoin chart.

Bitcoin_20191126_07_04.thumb.png.5973a9f464f21ad3487f20b658dcdbf2.png

Yes the chart is not exactly the same but the point I am trying to articulate is that the 'directional move' for both is the same during a similar time period. 

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Member Statistics

    • Total Topics
      7,879
    • Total Posts
      41,766
    • Total Members
      52,013
    Newest Member
    trader12341
    Joined 15/12/19 04:38
  • Posts

    • I think those swings were tradeable with a reduced position size on the Nikkei which tends to respect weekly pivots during European and American trading hours.
    • @dmedin, I don't know the answer but there may be others on the IG Community that are more knowledgable than me or even use EWT both successfully and are hugely profitable applying it. They may be aware of certain assets where the probabilities of using EWT are in their favour due to confirmed historical evidence. There may well be evidence that certain assets adhere to EWT more than others on a historical basis. Of course that does not guarantee that the assets will do so in the future but it just increases the odds and the likelihood of it occurring again.  Just because I don't have the knowledge or evidence does not mean such assets do not exist where the application of EWT would be greatly increase your chances of successful and profitable trades. I personally do not use or apply EWT to my trading and it has not hindered me. I would be interested in knowing which assets adhere to EWT more than others and what the percentages are. For example are there any assets which adhere to EWT historically over 70%? Let us put Natural Gas to one side for the moment as I personally think due to the extreme volatility you would have to be a supreme EWT technician to be able to consistently make profitable trades on Natural Gas using EWT. If you put NG to one side then are there any other assets which say adhere to EWT historically from say 50% - 70% of the time? I do not know the answer but if anyone does know then it would be very interesting and helpful to the IG Community, especially for those who are genuinely interested in EWT and applying it to their trading.  Also for those assets which say do adhere to EWT over 50% of the time how does a trader know that it will so on the next trend, next move up or down, etc? How does one establish apart from a failed trade after the event on whether the asset is going to adhere to EWT?
    • S&P has tested that trend line and is now blasting into outer space.  🥳
×
×