Connect with us

Economics

7 Cryptocurrencies to Consider in Light of the Bitcoin Beatdown

For those less-versed in cryptocurrency trading, shedding 10% in value over a week, as Bitcoin (CCC:BTC-USD) had at time of writing, is an uncomfortable…

Published

on

This article was originally published by Investor Place

For those less-versed in cryptocurrency trading, shedding 10% in value over a week, as Bitcoin (CCC:BTC-USD) had at time of writing, is an uncomfortable experience. With Chinese government authorities labeling cryptos and their mining process as “extremely harmful,” the virtual currency sector has decided to take a breather. That won’t stop proponents from clambering onboard.

Indeed, one of the trending terms on various social media platforms is “buy the dip,” a rallying cry for both cryptos and meme stocks. Despite the existence of other powerful fundamental headwinds, particularly the strong dollar weighing down cryptos per the Wall Street Journal, advocates of blockchain-derived coins and tokens remain undeterred. Honestly, with Bitcoin consistently defying gravity, it’s hard not to feel bullish about the red ink.

But is this really a “buy the dip” opportunity? While cryptos represent one of the biggest talking points this year, it’s important to avoid magical thinking with this sector. Anything and everything is liable for a correction. Regarding Bitcoin specifically, my research suggests that the original virtual currency is printing an asymptotic exponential curve; that is, as BTC rises, traders have an exponentially more difficult time generating big percentage swings.

Bitcoin long-term chart
Click to Enlarge
Source: Chart by Josh Enomoto

But let’s toss out the jargon and get down to the numbers. Between 2010 through 2015, Bitcoin generated 1,700X returns when comparing annual average prices. From 2015 through mid-November of this year, BTC generated 172X returns. While that’s still a gargantuan profit, BTC is taking longer to generate lower returns than in previous paradigms. Thus, we have a higher-risk, lower-potential-reward environment, which if translated into mathematical principles is the hallmark of an asymptotic exponential equation.

As well, the variance between each year’s highest and lowest price point has become much more narrower in recent years. On the surface, this implies that volatility is dying down. At the same time, it also means that upward mobility is pressured. Again, Bitcoin is trending inside a higher-risk, lower-reward ecosystem, which could incentivize these alternative cryptos.

Here are 7 cryptos to consider in light of the Bitcoin beatdown:

While no one knows what will happen in the future, it’s important to keep in mind the scarcity principle. In short, there are only so many resources to go around, meaning that it may be more advantageous to consider cryptos that haven’t received an enormous influx of investor capital.

Litecoin (LTC-USD)

Image of one litecoin in front of many stacks of litecoinsSource: Wit Olszewski / Shutterstock.com

Just a week ago, Litecoin appeared to be challenging the $300 level. Unfortunately, the wave of negative headlines pressured Bitcoin, which in turn took LTC-USD down several notches. Presently, the original altcoin is trading hands just below $225.

Part of the reason why Litecoin might be a better choice for speculation — and that’s what all cryptos are, pure speculation — is that LTC-USD is flying under the radar. Not too much, where it’s at danger of crashing into the ocean, but just enough to keep traders interested without drawing intense interest, which in turn leads to devastating crashes.

And more companies are accepting cryptos as payment. Of course, with more than 213 million companies operating worldwide, the ratio of virtual currency acceptance is ridiculously low. Nevertheless, if such integration continues on an upward trajectory, Litecoin will make for a better payment system.

Simply, it’s much faster than the rather anachronistic Bitcoin, which has become a store of value. Plus, with a three-digit price tag, it’s easier to conceptualize.

Bitcoin Cash (BCH-USD)

A concept coin for Bitcoin Cash (BCH).Source: Shutterstock

Back in its day, Bitcoin Cash was a hotbed of controversy. Prior to the hard fork that gave life to BCH-USD, Bitcoin users and developers agreed that its underlying blockchain architecture was aging relative to the influx of demand it had been enjoying. But conflict stemmed from how to resolve the nagging issue.

To make a long story short, those who wanted a faster and less-expensive mechanism for transacting digital assets — the original goal of Bitcoin — decided that the only solution possible was a separate, “enhanced” blockchain network. So BCH-USD forked from the original blockchain, resulting in mixed feelings from the crypto community.

Today, the controversy isn’t as intense as it once was. And to be sure, the original Bitcoin has been the standout winner in the debate. While Bitcoin has gone on to post record high after record high, Bitcoin Cash can’t even approach its December 2017 peak.

Still, there’s a chance that BCH-USD could be a slow burn. Even with recent volatility, the crypto coin has been printing a series of higher lows since July 2021. It’s one to watch if you have a contrarian take on cryptos.

Crypto.com Coin (CRO-USD)

A concept image of the Crypto.com Coin token, CRO.Source: Stanslavs / Shutterstock.com

One of the riskiest cryptos out there in my opinion, Crypto.com Coin is the exact opposite of an under-the-radar play. Since launching in late 2018, CRO has made quite an impression on the virtual currency community, which is tied to the namesake blockchain network. In turn, the “CRO blockchain serves primarily as a vehicle that powers the Crypto.com Pay mobile payments app,” per Coinmarketcap.

As if the token needed any more attention, Crypto.com Coin is one of the relatively few digital assets that have printed double-digit gains over a 24-hour period while Bitcoin flounders just below $60,000. Generally speaking, cryptos have a tendency of playing follow the leader with BTC-USD, so I wouldn’t bet the farm at CRO’s current price point.

Still, if the token manages to drop lower, this would be a discount I wouldn’t mind buying the dips on. And no, I’m not just saying that. Part of my confidence stems in the fact that Crypto.com now commands a substantial global footprint. For instance, its partnership with Formula 1 — an auto racing series that travels across the globe — represents a huge lift for CRO and cryptos as a whole.

Ethereum Classic (ETC-USD)

A concept shot of the Ethereum Classic (ETC) coinSource: Shutterstock

If you’re new to cryptos, you might think that there’s only one Ethereum (CCC:ETH-USD) in the virtual currency realm. However, Ethereum Classic is the legacy chain of Ethereum. That means the developers of ETC-USD are actually Vitalik Buterin and Gavin Wood, two names that are synonymous with Ethereum and its missing to integrate smart contract applications to decentralized protocols.

As with Bitcoin Cash, the hard fork that sparked a split between ETC-USD and ETH-USD was extremely contentious. Following a major hack, Ethereum participants disagreed on how to resolve the issue, with many wanting to revert the underlying blockchain to cancel out the hack’s impact while others felt that such a revision would spiritually contradict the purpose of decentralization.

Obviously, the two sides couldn’t come to a consensus and Ethereum Classic decided to stay true. To be clear, this has resulted in 51% attacks, which allow hackers to control the target blockchain, including initiating actions like double-spending coins.

On the plus side, ETC-USD’s supply is fixed, which basically means that it’s a deflationary investment. While ETC-USD features several risks you shouldn’t ignore, it might not be a bad place for wagers with dumb money.

Theta (THETA-USD)

A close-up shot of the concept for a cryptocurrency exchange page.Source: PixieMe / Shutterstock.com

Among the more intriguing cryptos on a fundamental basis, Theta is essentially a decentralized version of the content delivery network (CDN). Originally conceptualized to reduce bottlenecks in the internet, CDNs distribute data sources spatially to end users, thus improving availability and performance. Naturally, CDNs were vital during the pandemic-fueled lockdowns as people hopped online to fulfill both professional and personal needs.

Theta applies the same concept but promotes distribution of rewards. Under a traditional CDN, only the provider accrues financial benefit. With Theta, users can contribute unused bandwidth to the network, thus helping the network operate while receiving crypto rewards — the underlying THETA-USD coin — for their troubles.

It’s a novel solution, one that promotes inclusivity to power modern digital innovations. To be fair, though, the risk factor involves market volatility. If Theta crumbles in price, it’s hard to imagine that network users will continue offering their valuable bandwidth in exchange for virtual currencies of questionable viability.

But I’d be remiss in not pointing out that THETA-USD has been charting a series of higher lows since July of this year. Like the other cryptos, it’s one to consider with speculation funds.

Dash (DASH-USD)

Dash 1600Source: Inked Pixels / Shutterstock.com

One of the more popular alternative cryptos a few years ago, Dash has really fallen off the radar. Ranked at number 72 in terms of market capitalization, other digital assets have crowded into the space, pushing out some of the old timers, so to speak.

Still, it’s an intriguing concept. From Coinmarketcap’s description, “Dash is an open-source blockchain and cryptocurrency focused on offering a fast, cheap global payments network that is decentralized in nature. According to the project’s white paper, Dash seeks to improve upon Bitcoin by providing stronger privacy and faster transactions.”

For those who are curious, the name Dash comes from the phrase “digital cash.” Launched in 2014 as a fork of Litecoin, the DASH protocol is user friendly and scalable. It falls under the group of cryptos that are tied to practical payment applications.

Granted, the rise of meme coins has helped push Dash into the background but that might work to its advantage. Currently, it’s one of the digital assets that has been printing a series of lower highs since July of this year, suggesting it could break out higher.

Dogecoin (DOGE-USD)

Dogecoin CryptocurrencySource: Orpheus FX / Shutterstock.com

As I’ve mentioned in recent InvestorPlace articles, I’ve had a change of heart regarding Dogecoin and risky cryptos of its ilk. No, I don’t think they’re suddenly wonderful investments. Indeed, you are taking a major gamble if you put serious money into DOGE-USD. But the thing is, cryptos like Bitcoin require a massive amount of money to gain a comparatively small reward.

I don’t know about you but I’d rather do the opposite: bet small, win big.

True, based on historical data, Bitcoin has a greater probability of rising higher than Dogecoin, which could potentially crumble under the weight of its hubris. But the latest volatility in BTC was a warning shot. If you had bought one BTC-USD near $70,000, you’d be staring at a $10,000 loss today.

Most regular folks can’t absorb that kind of devastation so they’ll stay put. But what if BTC-USD drops to $50,000? That’s another $10,000 loss. Yet the same people will hold because losing $20,000 is truly unbearable. And so the spiral continues.

With Dogecoin, you can enjoy BTC-USD’s reward potential but with a fraction of the risk. As I said, that seems a more favorable proposition.

On the date of publication, Josh Enomoto held a LONG position in BTC-USD, LTC-USD, BCH-USD, ETC-USD, ETH-USD and DOGE-USD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

More From InvestorPlace

The post 7 Cryptocurrencies to Consider in Light of the Bitcoin Beatdown appeared first on InvestorPlace.





Author: Josh Enomoto

Economics

Bullish Island Reversal

You can blame Omicron or elevated valuations or call it a
Fed taper tantrum. Bottom line, the market was overbought entering the
seasonally weak beginning…

You can blame Omicron or elevated valuations or call it a
Fed taper tantrum. Bottom line, the market was overbought entering the
seasonally weak beginning of December. In a year with big gains early December
tax-loss selling, some profit taking and yearend portfolio restructuring is not
surprising.

All of the above and some geopolitical worries likely
conspired collectively to cause the recent selloff. But today’s action in DJIA
(the oldest reliable benchmark we know) as shown in the chart above created a
bullish island reversal. DJIA also bounced off the uptrend line from the June
and September lows right near the 200-day moving average and above support at 33700.
Today’s rally also closed the island gap near 35600, which is also around support/resistance
at the August high. And to top it off there was a new MACD Buy crossover and
histogram confirmation.

So, technically speaking the market likely found some solid
support here and is poised to rally to continuing new highs into yearend on the
still super accommodative monetary policy and rather robust economic and
corporate readings.

Our outlook remains bullish for the remainder of 2021 and as
long as the proverbial stuff doesn’t hit the fan, new highs are likely before
yearend and we would not be surprised to see the S&P 500 encroach upon the
big round number of 5000. 2022 will likely be a different case and we will
address that thoroughly in our 2022 Annual Forecast to subscribers next week.




Author: Author

Continue Reading

Economics

When Idiocy Becomes Hardwired

When Idiocy Becomes Hardwired

Authored by Jeff Thomas via InternationalMan.com,

At this point, virtually all of us over the age of forty…

When Idiocy Becomes Hardwired

Authored by Jeff Thomas via InternationalMan.com,

At this point, virtually all of us over the age of forty have encountered enough “snowflakes” (those Millennials who have a meltdown if anything they say or believe is challenged) to understand that, increasingly, young people are being systemically coddled to the point that they cannot cope with their “reality” being questioned.

The post-war baby boomers were the first “spoiled” generation, with tens of millions of children raised under the concept that, “I don’t want my children to have to experience the hardships that I faced growing up.”

Those jurisdictions that prospered most (the EU, US, Canada, etc.) were, not coincidentally, the ones where this form of childrearing became most prevalent.

The net result was the ’60s generation – young adults who could be praised for their idealism in pursuing the peace movement, the civil rights movement, and equal rights for women. But those same young adults were spoiled to the degree that many felt that it made perfect sense that they should attend expensive colleges but spend much of their study time pursuing sex, drugs, and rock and roll.

Flunking out or dropping out was not seen as a major issue and very few of them felt any particular guilt about having squandered their parents’ life savings in the process.

The boomer generation then became the yuppies as they hit middle age, and not surprisingly, many coddled their own children even more than they themselves had been coddled.

As a result of ever-greater indulgence with each new generation of children, tens of millions of Millennials now display the result of parents doing all they can to remove every possible hardship from their children’s experience, no matter how small.

Many in their generation never had to do chores, have a paper route, or get good grades in order to be given an exceptional reward, such as a cell phone. They grew to adulthood without any understanding of cause and effect, effort and reward.

Theoretically, the outcome was to be a generation that was free from troubles, free from stress, who would have only happy thoughts. The trouble with this ideal was that, by the time they reached adulthood, many of the critical life’s lessons had been missing from their upbringing.

In the years during which their brains were biologically expanding and developing, they had been hardwired to expect continued indulgence throughout their lives. Any thought that they had was treated as valid, even if it was insupportable in logic.

And, today, we’re witnessing the fruits of this upbringing. Tens of millions of Millennials have never learned the concept of humility. They’re often unable to cope with their thoughts and perceptions being questioned and, in fact, often cannot think outside of themselves to understand the thoughts and perceptions of others.

They tend to be offended extremely easily and, worse, don’t know what to do when this occurs. They have such a high perception of their own self-importance that they can’t cope with being confronted, regardless of the validity of the other person’s reasoning. How they feel is far more important than logic or fact.

Hypersensitive vulnerability is a major consequence, but a greater casualty is Truth. Truth has gone from being fundamental to being something “optional” – subjective or relative and of lesser importance than someone being offended or hurt.

Of course, it would be easy to simply fob these young adults off as emotional mutants – spiteful narcissists – who cannot survive school without the school’s provision of safe spaces, cookies, puppies, and hug sessions.

Previous generations of students (my own included) were often intimidated when presented with course books that had titles like Elements of Calculus and Analytic Geometry. But such books had their purpose. They were part of what had to be dealt with in order to be prepared for the adult world of ever-expanding technology.

In addition, it was expected that any student be prepared to learn (at university, if he had not already done so at home), to consider all points of view, including those less palatable. In debating classes, he’d be expected to take any side of any argument and argue it as best he could.

In large measure, these requirements have disappeared from institutions of higher learning, and in their place, colleges provide colouring books, Play-Doh, and cry closets.

At the same time as a generation of “snowflakes” is being created, the same jurisdictions that are most prominently creating them (the above-mentioned EU, US, Canada, etc.) are facing, not just a generation of young adults who have a meltdown when challenged in some small way. They’re facing an international economic and political meltdown of epic proportions.

Several generations of business and political leaders have created the greatest “kick the can” bubble that the world has ever witnessed.

We can’t pinpoint the day on which this bubble will pop, but it would appear that we may now be quite close, as those who have been kicking the can have been running out of the means to continue.

The approach of a crisis is doubly concerning, as, historically, whenever generations of older people destroy their economy from within, it invariably falls to the younger generation to dig the country out of the resultant rubble.

Never in history has a crisis of such great proportions loomed and yet, never in history has the unfortunate generation that will inherit the damage been so unequivocally incapable of coping with that damage.

As unpleasant as it may be to accept, there’s no solution for idiocy. Any society that has hardwired a generation of its children to be unable to cope will find that that generation will be a lost one.

It will, in fact, be the following generation – the one that has grown up during the aftermath of the collapse – that will, of necessity, develop the skills needed to cope with an actual recovery.

So, does that mean that the world will be in chaos for more than a generation before the next batch of people can be raised to cope?

Well, no. Actually, that’s already happening. In Europe, where the Millennial trend exists, western Europeans have been growing up coddled and incapable, whilst eastern Europeans, who have experienced war and hardship, are growing up to be quite capable of handling whatever hardships come their way. Likewise, in Asia, the percentage of young people who are being raised to understand that they must soon shoulder the responsibility of the future is quite high.

And elsewhere in the world – outside the sphere of the EU, US, Canada, etc. – the same is largely true.

As has been forever true throughout history, civilisation does not come to a halt. It’s a “movable feast” that merely changes geographic locations from one era to another.

Always, as one star burns out, another takes its place. What’s of paramount importance is to read the tea leaves – to see the future coming and adjust for it.

*  *  *

Polls suggest that a majority of Millennials now favor socialism. And a growing number favor outright communism. Sometime this year, Millennials are expected to surpass Baby Boomers as the nation’s largest living adult generation. This is one of the reasons Bernie Sanders and other socialists are soaring in popularity. And when the next crisis hits, the situation will likely reach a tipping point. That’s exactly why Doug Casey and his team just released this urgent video outlining exactly what’s going to happen… and how you can protect yourself and even profit from the situation. Click here to watch it now.

Tyler Durden
Tue, 12/07/2021 – 17:25

Author: Tyler Durden

Continue Reading

Economics

Omicron Study Scare Stuns ‘Face-Ripping’ FOMO Short-Squeeze

Omicron Study Scare Stuns ‘Face-Ripping’ FOMO Short-Squeeze

Everything was awesome today…

UNTIL…

Headlines from a South African…

Omicron Study Scare Stuns ‘Face-Ripping’ FOMO Short-Squeeze

Everything was awesome today…

UNTIL…

Headlines from a South African study hit, suggesting a 40-fold reduction in neutralization capacity of the Pfizer vaccine vs Omicron... which suggest hospitals will get overwhelmed (due to its hyper-transmissibility) but it is notably less severe (especially for healthy people)…

Omicron’s ability to evade vaccine and infection-induced immunity is “robust but not complete,” said the research head of a laboratory at the Africa Health Research Institute in South Africa.

…and that sent stocks lower late in the day (although still a good day overall)…

And slammed ‘recovery’ stocks relative to ‘stay at home’ stocks…

But then again… it wouldn’t be the US equity market if a last minute total buying-panic didn’t send the Nasdaq up 100 points in 4 minutes…

*  *  *

As we detailed earlier…A China RRR cut? Omicron anxiety easing? Whatever it was, bubble markets exploded higher today…

Source: Bloomberg

But before we all get excited about “what the market is saying”, let’s bear in mind that today also saw the USA, USA, USA suffer its biggest decline in worker productivity since Q2 1960 (yeah 61 years ago!!!)…

Source: Bloomberg

Which is perfect because today saw unprofitable tech company’s best 2-day swing since April 2020 (+13.5%)…

Source: Bloomberg

Today’s melt-up from the moment the US cash markets opened (until around the European close) was impressive to say the least but also note that stonks were bid as China opened… and as Europe opened…

This is The Dow’s best 2 days since Nov 2020! Nasdaq surged 3% today – its biggest daily gain since March. Bear in mind that roughly 66% of the Nasdaq is in a bear market with losses of over 20%, while 35% of the Nasdaq is down over 50%!

The surge in the majors pushed The Dow (and only The Dow) up to unchanged, very briefly, from the Omicron emergence cliff after Thanksgiving. However, everything seemed to run out of momentum at that point…

Nasdaq and The Dow exploded above their 50DMAs, the S&P extended its gains well above its 50DMA. The Dow ripped up to its 100-/200-DMA but couldn’t extend the gains…

The 2-day ‘face-ripping’ short-squeeze off yesterday’s opening lows is the largest swing since March…

Source: Bloomberg

‘Recovery’ stocks notably outperformed today relative to ‘Stay at Home’ stocks as Omicron anxiety fades. They are now well above Omicron emergence levels and starting to erase the European lockdown anxiety losses…

Source: Bloomberg

‘Retail Favorites’ had their biggest day since Jan 2021…

Source: Bloomberg

Treasury yields were higher on the day with the short-end underperforming (2Y +6bps, 30Y +3bps), but as the chart below shows, the selling was all in the US session again…

Source: Bloomberg

The 10Y Yield was higher again but did not breach 1.50%, retracing the move post-Powell hawkish hearing…

Source: Bloomberg

The yield curve flattened notably today (2s30s) as the short-end priced in rate-hikes and long-end priced in policy mistakes…

Source: Bloomberg

The dollar ended lower on the day but again traded in a narrow range…

Source: Bloomberg

WTI topped $73 today, extending the gains from the last couple of days. However, oil prices remain well down from pre-Omicron levels…

And as oil prices ripped higher, so did US Breakeven inflation rates, but remain well down from pre-Omicron anxiety levels…

Source: Bloomberg

Crypto was mixed today with Bitcoin higher (tagging $52k) and Ethereum lower (after topping $4400)…

Source: Bloomberg

Gold ended modestly higher today but still below $1800 and well below pre-Omicron levels….

Finally, despite the equity market soaring unrelentlessly the last couple of days, STIRs have shifted considerably more hawkishly now pricing in 2 rate-hikes by September and a 75% chance of a rate-hike by May 2022 – there is no way the stock market is ready for that…

Source: Bloomberg

And Powell is not about to jawbone that back down.

Tyler Durden
Tue, 12/07/2021 – 16:01





Author: Tyler Durden

Continue Reading

Trending