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June 26, 2017, 04:12:08 PM |
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(such a shady title right?)
In this highly finance oriented world of cryptos, with all the exchanges, and charts we see and analyze, I believe that adding a bit of basic economics it healthy.
The reason is simple: trading techniques and chart analysis are for the short term, and a more macro-economic approach will help on the long run. The explanation is even simpler: trading techniques target the existing market and try to optimize flows within this semi-closed market.
They don’t increase the demand from the outside, and their constantly evolving algorithms generate more and more disturbances. The vicious circle is that volatility can yield to better results sometimes for day-trading, and let the algorithm think it is getting better... thus going this way (it's like cancer...).
Bottom line is: Pump groups, robot-block-walls on the exchanges, signal analysis, or even simple Stop-Loss orders are only generating more volatility on the market and do not bring added value to the system. They just re-shuffle temporary the values of its' components (coins).
What we need is more DEMAND, from the outside. More Fiat turned into BTC, en thturned into alts.
-> If we want a x10 or even a x100, we therefore simply need more people to be interested in altcoins.
(Note: And this is where volatility is our enemy, it can scare the newcomers).
From a stupidly basic economic point of view, we have an offer vs. demand issue... and hence a solution.
The OFFER of altcoins is increasing, with all the ICOs, therefore, if we do not ensure that DEMAND raises, we will see bad times coming soon.
When I say DEMAND, I speak about NEW-ENTRANTS in the markets, people who will trade their "K or W earned" EUR, KRW or USD for BTC and then into Alt-coins. (Note; W stands of WORK, K for Capital)
When demand raises, the market grows. Offer vs. Demand is always right. Elasticity creates pricing power when the offer starts to be challenged by the demand. Everything raises because we pump the value from the fiat market.
CONCLUSION: the ONLY way out up is to have more and more people jumping in the crytpo-currency world.
A recent study shows that only 3 Million people in the world are trading alt-coins. We need this figure to be x10, it can even be x100 easily in the mid-term.
-> Stop evangelizing here on this specialized place, you preach in your own church: become a missionary and speak the world about cryptos.
(and please... undo your stop-loss orders..., you will lose your shirt, sawing the branch on which you are seated because you see it bending a bit.)
We need more DEMAND.
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