*Factors Affecting Cryptocurrencies:*
Cryptocurrencies have been the most popular investment option in recent times. Bitcoin daily volatility has attracted a massive crowd. The factors affecting cryptocurrencies include:
(1) **Cryptocurrency Price Volatility**. There are various factors that affect bitcoin price.
(a) Supply and Demand: The basic principle is: The cryptocurrency price increases with the increase in demand or decrease in supply, while the cryptocurrency price decreases with the decrease in demand or increase in supply.
(b) The demand of the Cryptocurrency: The demand depends upon cryptocurrency awareness, news or interpretation about cryptocurrency, and global acceptance of cryptocurrency.
(2) **Institutional Investors vs Retail Investors.**For now, many cryptocurrency investors are just holding their holdings patiently in order to find out whether the cryptocurrencies resume their uptrend or not. It is still too uncertain for most of the investors to take a call. However, institutions are increasing their presence in the cryptocurrencies space which is sure to benefit the cryptocurrency sphere and would add value and credibility to the cryptocurrencies in the future as well. This is one of the main reasons why it is not seeing further fall after creating a bottom a few weeks back. Moreover, once the regulatory hurdles are sorted, you can be sure that the value of cryptocurrencies would again more.
*Effect of bad press hampering rate of adoption:*
A number of high profile investors and economists have criticized cryptocurrencies** **in recent months. Economist Nouriel Roubini called bitcoin "bullsh*t," Warren Buffett likened bitcoin to "rat poison," and Bill Gates has said he would like to short bitcoin.
*Why Tether (USDT) might cause the markets to tumble:*
The original idea of Tether was great, a cryptocurrency that is ‘backed’ by the dollar. Investors loved Tether as it was a safe haven for storing profits. I often used Tether to protect my gains from the markets correcting. To understand entirely why Tether (USDT) will cause the markets to crash let’s first look at what Tether is.
As mentioned before, Tether is a cryptocurrency that is supposedly backed by the dollar. To quote from their website: “Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD.”
In order for this cryptocurrency to work there needs to be frequent and very accurate auditing, and to begin with Tether did publish their audits monthly. This is where the problem arises. Tether has not posted their audited accounts for several months, they had a contract with an auditing firm called Friedman LLP that began many months ago and was recently terminated for reasons ‘unknown’. Of course, Friedman LLP cannot disclose Bitfinex’s accounts however it does not take a genius to understand that the realistic reasoning is that Friendman LLP have discovered severe flaws in their accounts and do not want reputational damages. To further back this point, all mentions of Bitfinex (who have close ties to USDT) have been removed from their website.
*Bitcoins Upside Potential:*
Friday's drop below $6,240 had created room for a drop to the June low of $5,755. Further, BTC closed below Thursday's low of $6,183 on Friday, signaling a continuation of the sell-off from the July 25 high of $8,507. However, BTC will likely find acceptance above the falling trend line hurdle of $6,480 and extend the corrective rally from the six-week low of $6,000 to $6,850 in some time in the near future.
Moreover, Bitcoin has been clearing more transaction volume than global gold markets since early 2017. BTC is on pace to process $1.1 trillion in 2018 transactions, while gold is on pace to process only $0.4 trillion in 2018 transactions.
In 2014 with bitcoin at only $413, popular VC, Tim Draper predicted bitcoin to reach $10,000 in three years. This was fulfilled a month earlier than he predicated earning him a reputation among crypto fans. Though he didn’t categorically, predict a $100k Bitcoin in 2018, He said he expected the Bitcoin to continue its growth in an interview with Bloomberg last year. Tim Draper has made successful bets with Tesla, Skype, and Twitter in the past.
Assuming this growth happens at the same pace as the 3-year journey to $10k then we’re in for six digits.
*A Word on Trading with Margin:*
Margin Trading refers to the practice of using borrowed funds from a broker to trade a digital asset, which forms the collateral for the loan from the broker. Such use of leverage can magnify gains. Moreover, you can choose to long or short a certain coin. Buying on margin is borrowing money from a broker, in this case, Huobi (http://[Suspicious link removed]/2HK1PPs), to purchase cryptocurrencies. You can think of it as a loan from your brokerage. Margin trading allows you to buy more cryptocurrencies than you'd be able to normally. To trade on margin, you need a margin account. This is different from a regular cash account, in which you trade using only the money in the account. If you have not done so already, make sure to register for your personal Huobi Global account (http://[Suspicious link removed]/2HK1PPs) and participate in the global community today!
You can also find Huobi online at:
Huobi Global Website:
https://www.huobi.com (
https://www.huobi.com/)
Huobi Global Telegram Group:
https://t.me/huobiglobalofficial (
https://t.me/huobiglobalofficial)
Blog:
https://blog.huobi.com/ (
https://blog.huobi.com/)
Facebook:
https://www.facebook.com/huobiglobalofficial (
https://www.facebook.com/huobiglobalofficial)
Instagram:
https://www.instagram.com/huobiglobalofficial (
https://www.instagram.com/huobiglobalofficial)
Medium:
https://medium.com/@huobiglobal (
https://medium.com/@huobiglobal)
Twitter:
https://twitter.com/HuobiGlobal (
https://twitter.com/HuobiGlobal)
Youtube:
https://www.youtube.com/HuobiGlobal (
https://www.youtube.com/HuobiGlobal)
** Note: *The material provided herein is general in nature and does not take into account your objectives, financial situation or needs. While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. For the avoidance of doubt, this article is solely intended to be for general information only and does not in any way constitute as professional advice or financial advice. This is not an invitation or an offer to buy or sell cryptocurrencies, nor is it a recommendation to buy or sell specific types of cryptocurrencies. Trading cryptocurrencies carries a high level of risk that may not be suitable for some. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice.
