Is anyone actually reporting cryptocurrency trades in their 2017 tax returns?

Despite months of warnings to pay their taxes on cryptocurrency profits, American Bitcoin investors aren’t in a hurry to tell Uncle Sam what they owe.

Early data from one popular tax preparation service shows that only a minuscule proportion—just .04%—of U.S. tax filers have reported their cryptocurrency gains and losses to the Internal Revenue Service so far this year. That’s far fewer than the 7% of Americans who are estimated to own Bitcoin or another cryptocurrency, and who are likely to owe taxes to the IRS on those investments.

Of the first 250,000 people to file their tax returns using Credit Karma, fewer than 100 of them disclosed any taxable event for cryptocurrency. Of those, only a single person disclosed a crypto gain or loss big enough to be “significant,” according to Credit Karma, a free credit-monitoring startup.

While it’s still early in tax season—at last count, the IRS had received only…

 

Continue Reading at Fortune.com

 

Will Ethereum Leapfrog Bitcoin in the Next 2 Months?

It seems a wild statement to make, given the disparity in value between the two cryptocurrency giants (at time of writing, Bitcoin’s value exceeds Ethereum’s by a factor of ten), but we’re not talking about pricing, but market dominance.

Since it kickstarted the digital currency phenomenon back in January of 2009, Bitcoin has always been way ahead in terms of its dominance of the market cap. We determine this through the comparative growth of Bitcoin as a percentage of the overall growth of the market.

As new coins enter the sector, if their growth from initial investment exceeds the market average, then their dominance increases, and Bitcoin’s decreases. This doesn’t necessarily mean a decrease in value for Bitcoin (although one often goes hand-in-hand with the other) merely that the newer currency is growing at a faster rate than the originator.

This is exactly what we are seeing at the moment with…

Continue Reading At CryptoDaily.co.uk

Is Bitcoin Behind the Recent Drop in the Stock Market? The Truth Will Surprise You!

While market purists have traditionally drawn a strong line between the young cryptocurrency market and the traditional stock market, analysts are now having a harder time denying the correlation between the two.


Who’s Hurting Who?

Some analysts have essentially been pointing their fingers at Bitcoin’s recent decline in price and gloating in what amounts to little more than “I told you so.” However, crypto non-believers have had to take a step back and reevaluate, following The Dow Jones industrial average’s record-setting plunge earlier this week.

DOW dropped 1,175 points by the end of the day on Monday, and it’s no coincidence that Bitcoin also fell to one of its lowest points in two months at the same time, temporarily trading below $6,000.

Dow Jones and Crypto - Who's Hurting Who?

Though Bitcoin and other cryptocurrencies had already been experiencing a fairly steep correction, both the DOW and Bitcoin’s drop suggests a stronger correlation than was once believed.

According to Christopher Harvey, head of equity strategy at Wells Fargo, a hit to the stock market can cause weak-handed investors to sell their Bitcoin – mostly due to an unloading of risk. Harvey noted:

On Monday what we saw is all risk products sell off. As risk gets sold, it sometimes adds fuel to the fire.

He also described last year’s bull run as “money chasing,” which increased both volatility and the demand for liquidity.

Harvey also claims that, as the stock market charged ahead early this year, the level of risk continued to rise—encouraging those investors eager for big gains to take a look at the cryptocurrency market. Those same investors likely bailed on Bitcoin when the DOW dropped.

Bitcoin Markets

What Harvey doesn’t suggest, however, is that it also works the other way around—where Bitcoin and other cryptocurrencies could affect the traditional stock market.

After all, it’s not unreasonable to take the strategist’s own risk-centered argument and say that Bitcoin’s sharp decline from its all-time high in December had a direct impact on the stock market—especially once the dominant cryptocurrency found a home underneath the $10,000 mark. With Bitcoin representing a “high-risk investment,” watching it fall could’ve easily caused a sell-off of riskier investments in the traditional stock market.

Both the cryptocurrency and stock markets also shared a similar run-up to all-time highs during the euphoric bull run at the end 2017, perhaps helping carry each other.

Regardless of which market hurt which this week, one thing is certain: the correlation between cryptocurrency and traditional stocks is becoming more apparent by the week.

Do you think the Dow Jones’ sudden drop caused Bitcoin to reach an even lower-than-expected low? Or do you think Bitcoin’s correction caused a sell-off in the stock market? Let us know in the comments below!


Images courtesy of Shutterstock

The post Did Dow Jones’ Plunge Cause Bitcoin’s Drop – Or Vice Versa? appeared first on Bitcoinist.com.

Source: Bitcoininst

Op-Ed: Why I Believe Bitcoin’s Price Plunge is a Good Thing

A common refrain when people hear that I first embraced bitcoin in 2012 is, “I bet you’ve done quite well.” The truth is, I haven’t.

Honestly, I’ve never been much of an investor or saver. Instead, I prefer to live on the edge, in mystery and paradox. Therein lies my approach with bitcoin which I view as nothing more than an uber-efficient means of paying my rent, purchasing groceries, an occasional dinner out, book purchases and yoga classes.

Some see my ways as outright insane, particularly in light of the rise of transaction fees in recent months. Others view my experimentation as courageous, expressing envy at my willingness to give the middle finger to big banks.

I, for one, find myself annoyed at all of the frenzy around prices. Just the other day, my new neighbor asked if I could provide him with some advice and direction on selecting the next big crypto now that bitcoin has tanked. Guess he didn’t get the memo that I have little patience for these sorts of questions.

There is one phrase to describe my sentiments regarding the precipitous fall in the price of bitcoin? I’m delighted. And here are a few reasons why:

For starters, anyone with an ounce of sense should have been able to see that the massive bull run of 2017 was completely unsustainable. In my opinion, this development suggests nothing more than pure greed. So I believe at some point we’ll look back and see that this price pullback was a blessing in disguise for Bitcoin’s future.

Second, Satoshi Nakamoto must be rolling over in his grave watching his vision of a P2P currency get lost in price speculation. Frankly, after I gave the middle finger to Well Fargo and traditional banking, the opportunity to cheaply and securely transact in a peer-to-peer manner was the reason I jumped onboard the bitcoin bandwagon. Now I’m hopeful that this price decline will give us reason to pause and revisit Satoshi’s original intent.

Third, I believe bitcoin’s price more than anything may simply be a sideshow to a looming global economic reset. The good news here. As traditional investments like stocks begin to get slapped down amid their own bubble, I believe growing numbers of people will seek out or return to bitcoin, hopefully, this time with a more realistic view of price dynamics.

As my old friend Willie Jolley is fond of saying, “a setback is a setup for a comeback.” Is this an accurate view of bitcoin? Only time will tell.

The post Op-Ed: Why I Believe Bitcoin’s Price Plunge is a Good Thing appeared first on BTCMANAGER.

Source: BTC Manager

Cryptocurrency Predictions for 2018 That You Need to See

Dignitaries, Pundits, and Bigwigs Reveal Their 2018 Crypto-Predictions

Bitcoin and cryptocurrency markets have been extremely bearish over the past six weeks straight, and many investors are waiting for the light at the end of the tunnel. Last year around this time we reported on a variety of cryptocurrency dignitaries, pundits, and bigwigs and they revealed to us that their outlook for 2017 was exceedingly bullish. Now even after the long run of recent bitcoin market dips many blockchain industry luminaries and outside investors are still remarkably optimistic about cryptocurrency markets in 2018.

Also Read: UNICEF Asks Gamers to Mine Cryptocurrency for Syrian Children

The ‘Wolf of Wall Street’ Thinks BTC/USD Markets Will Top $50K But Then Crash

Ever since December 16, 2017, cryptocurrency markets have been on a downward spiral that seems never-ending. BTC/USD markets reached an all-time high globally touching $19,600 per coin and have since dropped to $7,200 six weeks later. Many traders are calling out different “bottoms” as some think the storm is almost over and others believe the price of bitcoin may drop even further. However with all the ‘doom and gloom’ charts and different ‘bottom calls,’ many cryptocurrency investors and industry executives believe 2018 will be just as phenomenal for bitcoin as it was last year.

Dignitaries, Pundits, and Bigwigs Reveal Their 2018 Crypto-Predictions

On January 31 the infamous “Wolf of Wall Street,” Jordan Belfort explained during a recent interview with the entrepreneur Patrick Bet-David that he doesn’t believe BTC is a scam. But he does believe Wall Street investors can easily manipulate the decentralized currency’s markets. Belfort thinks bitcoin will top last year’s all-time high, and explains to Patrick Bet-David that the cryptocurrency will likely top $50,000 before dropping significantly in value.

Fundstrat’s Tom Lee: ‘Crypto Remains Intact’

Dignitaries, Pundits, and Bigwigs Reveal Their 2018 Crypto-Predictions Three days ago the investment firm Fundstrat’s Tom Lee published a report that details even with the current bearish sentiment he is still bullish on bitcoin. Lee believes BTC/USD markets will reach $20K by mid-year and $25,000 by the end of 2018.                  

“It has been a terrible few weeks, but the fundamental positive story for crypto remains intact,” the head of research at Fundstrat Global Advisors stated.

Past sell-offs were followed by rallies of ~150% within 84 days,” Lee said. “In other words, we think the risk/reward at these levels warrants adding here, even if there is additional downside.

Nine Executives and Investors Predict Cryptocurrency Prices by the End of 2018

This week the survey and decision helper website Finder.com surveyed nine well-known fintech investors to see their cryptocurrency predictions for 2018. Cryptocurrencies included in the study include bitcoin core (BTC), bitcoin cash (BCH), Cardano (ADA), Ethereum (ETH), and nine other popular digital currencies. Survey participants in the research include Clayton Daniel of Fintech Founder, Michael Dunworth CEO and co-founder of Wyre Inc, Joseph Raczynski from Reuters, and more well-known executives.

Dignitaries, Pundits, and Bigwigs Reveal Their 2018 Crypto-Predictions

According to the survey, the participant’s cryptocurrency average price predictions (USD) place bitcoin core (BTC) at $14,928 by March 1, 2018. By the year’s end, the nine candidates say BTC/USD markets will top $43,472. Contributors also believe that bitcoin cash (BCH) will be $2,167 by March 1, and $3,083 at the end of 2018. The survey taken in February shows panelists believe Cardano (ADA) will have the most prosperous price climb this year (+1,669.52%) reaching $10.63. Further, each participant commented on each prediction and why they believe cryptocurrency markets will reach these levels.      

“I think [BTC] will show promise from scaling solutions, and ETFs platforms integrating the buying/selling component will provide broader reach for market adoption,” explains Michael Dunworth the CEO of Wyre.

‘We’re Really Still at the Beginning Stages’

Dignitaries, Pundits, and Bigwigs Reveal Their 2018 Crypto-Predictions
Jen Greyson, CEO of the Neureal Network.

Jen Greyson, the founder of the Neureal Network who was named one of the top eight women in crypto this past year by Chipin says cryptocurrency adoption is just getting started.   

“As adoption in the space continues, we’ll see a rise in bitcoin along with other altcoins — The usability of this new asset class continues to be a hurdle,” says Jen Greyson, CEO of the Neureal Network. 

As we find more opportunities to use crypto to pay for burgers and rent, we’ll see a continual uptick in the values across the board — We’re really still at the beginning stages.

Above all the mainstream media headlines predicting bitcoin’s price will continue downwards towards zero, there’s still many individuals who believe bitcoin and many other cryptocurrencies will continue their triumphant runs in 2018. Most of the time, unless there’s some market phenomenon the old saying ‘what comes up, must go down’ is usually correct. But at the same time, it is typically true for when markets hit a ‘bottom’ — Usually, the market is bound to go up.

What do you think about these luminaries, pundits, and executives crypto-predictions? Let us know in the comments below.


Images via Shutterstock, Jordan Belfort, Fundstrat, Finder.com, and Neureal. 


Do you like to research and read about Bitcoin technology? Check out Bitcoin.com’s Wiki page for an in-depth look at Bitcoin’s innovative technology and interesting history. 

The post Dignitaries, Pundits, and Bigwigs Reveal Their 2018 Crypto-Predictions appeared first on Bitcoin News.

Source: Bitcoinnews.com

Bitcoin is Down 50 Percent for 2018 – Here’s What You Need to Know

  • The digital currency briefly falls below $6,000 to its lowest since mid-November, according to CoinDesk.
  • The decline follows reports in the last week that have raised worries about increased regulation and potential price manipulation at a major cryptocurrency exchange.
  • The heads of the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission are also set to testify before the Senate Banking Committee on Tuesday.

The digital currency fell to a low of $5,947.40, its lowest since mid November, according to CoinDesk, whose bitcoin price index tracks prices from four major exchanges.

At a price of $6,088.02 at 8:56 a.m. London time, the cryptocurrency was down more than 11.9 percent on the day, according to CoinDesk. The site measures bitcoin based on Coordinated Universal Time — currently the same time zone as the U.K…

 

Continue Reading At CNBC.COM

‘Panic Mode’: Bitcoin Price Keeps Plunging

NEW YORK (Reuters) – Digital currency bitcoin fell more than 15 percent on Monday to a nearly three-month low amid a slew of concerns ranging from a global regulatory clampdown to a ban on using credit cards to buy bitcoin by British and U.S. banks.

On the Luxembourg-based Bitstamp exchange, bitcoin fell as low as $6,853.53 in early afternoon trading in New York. That marked a fall of more than half from a peak of almost $20,000 hit in December.

Bitcoin has fallen in six of the last eight trading session.

The currency, which surged more than 1,300 percent last year, has lost about half its value so far in 2018, as more governments and banks signal their intention for a regulatory crackdown. Last week bitcoin suffered its worst weekly performance since 2013…

Continue Reading At REUTERS

Here’s Why Crypto Is Correcting… and Why It’s Temporary

Last week, I was at my son’s friend’s birthday party, and one of the dads there brought up crypto.

We were discussing various coins when another parent overheard and broke into the conversation. “I hope you guys don’t own any bitcoin, because that thing is crashing hard!” he said with a grin.

I nodded politely and acknowledged that crypto is going through a rough patch, with prices correcting practically across the board.

Then I asked the other dad if he knew what a bitcoin cost a year ago. He didn’t.

So I told him that bitcoin was trading for around $948 one year ago. And that despite the recent pullback, bitcoin is still up around 9X to 10X over the last 12 months.

The entire crypto market, as tracked by Coinmarketcap, has risen from around $15 billion early last year to around $400 billion today.

I don’t know of any other asset that even comes close to these returns. And the further back you go, the more insane the returns get. When I first bought in the spring of 2013, bitcoin was trading for $84. And it had just run up to that price from around $5 only months before.

My point is that if you paid attention only to mainstream news sources, you might think bitcoin was trading at multiyear lows. It’s “crashing,” “plummeting “… it “won’t survive.”

I believe this pullback is completely natural. Here’s why…

A Natural (Yet Nasty) Correction

I look at the crypto market like this: 15 steps forward, nine steps back.

When an asset increases in value 20X, as bitcoin did last year, it’s only natural for some owners to take profits. Others who bought in at $15,000 or $19,000 are likely panic-selling.

This is simply how markets operate. Weak hands are shaken out during these times.

Yet a significant portion of the investors who bought in over the last year will hold strong. And they will continue to hold for years because historically, that’s the most proven way to make money in crypto. This is the sturdy base of crypto owners, and it continues to grow steadily.

Let’s look beyond price action for a moment and recognize that huge developments are taking place in the crypto world.

First, governments appear to be closer to regulating crypto markets. If done correctly, this will be a very positive development.

The fact that South Korea, for example, is banning anonymous cryptocurrency trading, is arguably a good thing.

We need trust to make these new markets work long term. And that will never happen if naysayers can point to crypto as a haven for hackers and criminals.

So, just as banks are required to verify accounts under “know your customer” laws, cryptocurrency exchanges around the globe are now moving in that direction as well.

We also got news this week that Robinhood, the commission-free stock trading service with millions of users, is moving into the crypto markets. Soon, users will be able to buy and sell crypto with zero commission.

Still, there’s clearly some other factor holding cryptocurrency markets back. And it’s not what you might expect…

Exchanges Are Growing Too Fast

A primary factor in the crypto pullback that most people haven’t recognized is this: Most exchanges are growing far too fast.

So many people are entering the market that many exchanges have had to shut down new user registrations. Most others can’t keep up with customer support.

Bittrex, Bitfinex, CEX. IO and Binance (four of the largest crypto exchanges in the world) have been forced to deny new customer accounts due to explosive growth.

Binance, for example, added 240,000 new accounts in a single hour on January 10. It has since stopped accepting new accounts and only recently began allowing a small number of new users per day.

Coinbase, the largest U.S.-based exchange, continues to experience major growing pains. Its customer support is flooded, and it can’t verify new accounts fast enough.

Exchanges simply can’t keep up with the massive influx of new crypto investors.

Naturally, this has put a damper on markets. When the flow of new buyers is bottlenecked by exchange capacity, it’s of course going to cause a temporary pullback in prices.

Behind the scenes, however, crypto exchanges are furiously upgrading their systems and hiring to meet demand. Due to security requirements and the fact that exchanges are now required to verify all customers, this takes time.

The point is that exponential user growth is a great problem to have. Exchanges are working diligently to accommodate new users, and I suspect that soon, most of them will reopen new account registrations and clear their customer service backlogs.

When this happens, I expect to see a sharp rebound in crypto markets. And then we can begin the next leg up. If we get more clarity on government regulation, even better. There’s also the X-factor of institutional buyers, who I still believe will start moving into the crypto market in the next few months.

By the end of the year, I’m fairly certain we’ll look back at this dip and say, “Damn, that was a great buying opportunity.” But in the midst of a nasty correction, the opportunity is hard to recognize.

It seems like the end of the world for crypto, but I assure you… it’s not.

We’re still at the very beginning.

Have a great weekend, everyone.

Adam Sharp
Co-Founder, Early Investing

The post Here’s Why Crypto Is Correcting… and Why It’s Temporary appeared first on Early Investing.

Source: Early Investing

More Bad News Pushes Bitcoin Below Key Level

Investor support continues to keep Bitcoin prices above $10,000 as mainstream media ‘FUD’ is countered by insights into the ongoing Tether row.


Mainstream FUD Fails To Reflect Reality

BTC hit a temporary low of $9777 Wednesday before rebounding, with traders standing firm as overall volume cools and transaction fees drop to among their lowest levels in months.

Prices had taken a fresh downturn after Bloomberg published an article about Tether and associated exchange Bitfinex receiving subpoenas from US regulators.

Tether

The news related to an event which, in fact, occurred in December 2017, but sent a wave of uncertainty through markets, which compounded uneasiness surrounding last week’s $530 million Coincheck hack.

As criticism mounts over the publication’s failure to mention the date the events took place, others continue to proclaim the imminent further decay of Bitcoin.

“While Bitcoin doesn’t trade in-line with the equity markets on a daily basis, it does seem Tuesday’s price drop is a Risk Off situation as the equity markets also moved lower,” Forbes wrote Tuesday while MarketWatch warns of Bitcoin’s “worst month in 3 years.”

At the same time, sentiment from within the cryptocurrency industry is already improving. On the topic of Tether, Litecoin creator Charlie Lee noted that the company continuing to issue USDT tokens after the subpoena was an encouraging sign of stability.

“…It’s expected for CFTC to subpoena Bitfinex to investigate if there are any wrongdoings. The fact that the subpoena is in December 2017 and they have still continued issuing USDT is good news,” he wrote in Twitter, adding that USDT was “just like any other altcoin.”

India Joins International Regulatory Overhaul

That constructive sentiment meanwhile continued in regulatory statements on the fringes of last week’s World Economic Conference 2018, with India’s finance minister Arun Jaitley becoming the latest voice to announce formal efforts to shape his country’s cryptocurrency environment.

“The government does not consider cryptocurrencies legal tender or coin, and will take all measures to curb the use of these crypto-assets in financing illegitimate activities or any part of payment systems,” he said in an annual budget speech.

Jaitley’s words were interpreted by some mainstream media journalists as being tantamount to deeming Bitcoin “illegal.”

Illegal activity was hinted as a priority for regulators in the UK and US at Davos, while France, Germany, and others reiterated calls for an international lawmaking effort surrounding Bitcoin.

What do you think about Bitcoin market sentiment this week? Let us know in the comments below!


Images courtesy of mosthdwallpapers.com, Twitter/@SatoshiLite, India.com, Bitcoinist archives.

The post Bitcoin Price Dives Below $10K As Fake News Bites appeared first on Bitcoinist.com.

Source: Bitcoininst

Revealed: The Only Crypto Investment Strategy That Makes Sense

As I write, it’s a red day. The second one in a row, actually.

Most cryptos are down… just like yesterday.

Obviously, the crypto world has been taking some hits recently.

Late last week, a Japanese cryptocurrency exchange reported more than $500 million worth of NEM (New Economy Movement) was stolen. And there’s more…

Earlier this month, French Minister for the Economy Bruno Le Maire restated his intention to include bitcoin as a major topic of debate at the upcoming G20 Summit in March.

Theresa May, England’s ineffectual leader, says her government is considering imposing regulations on crypto, preferably in coordination with the U.S.

And to top things off, China and Korea also made noises about more restrictions.

It sure seems like the noose is tightening around crypto…

On the other hand, any serious investor who has thought about the risks that crypto brings to the table probably had the same reaction I had…

Nothing really surprising or new here.

If any of these developments shocked or scared you, you clearly haven’t focused on the risk of owning crypto.

That’s okay… because we have.

And we’re willing to share with you some of our thinking on this important topic.

Our first piece of advice?

Don’t listen to the financial press.

The Mainstream Press Gets Crypto Risk Wrong

The mainstream press spends an inordinate amount of time reporting on government action (or inaction), hacks like the one that just happened with Japan’s Coincheck and price drops like the roughly 3% to 10% drops across the board we’ve seen yesterday and today.

Don’t get me wrong. It’s news. It should be covered. But the press offers little meaningful context or perspective.

Its reporting is shallow, misleading and often just plain wrong.

Let’s address the recent headlines one at a time…

Hacks. Yes, it’s lousy that it’s happening. And the pain is very real to those whose wallets were emptied. (By the way, Coincheck has pledged to pay back the losses to those affected.)

But it’s not a threat to the overall viability of the crypto space.

For one, unlike in the days of the Mt. Gox hack, there are a dozen major exchanges now. Though the amount stolen was more than what was purloined from Mt. Gox ($530 million versus $460 million), it was a much smaller amount when compared to the total value of crypto coins today.

The amount of NEM hacked? Less than one-tenth of one percent of crypto’s total market cap.

Let’s give the market some credit here. It reacted exactly as it should have. It’s not a big deal. The hack was reported on Friday. By Sunday, NEM was trading at a price exceeding the pre-hacked price.

There would have to be a series of large hacks squeezed into a short period of time to make a meaningful dent in the market.

That’s simply not in the cards.

Government actions and pronouncements. This has been a divisive issue from the get-go. Some crypto followers believe government regulation is sorely needed and would put crypto on firmer ground.

Others believe that governments will treat crypto as a major threat (which it is!) and overreact with excessively restrictive regulations that would suffocate this emerging and still somewhat fragile market.

First off all, governments – even one as powerful as the U.S. – cannot destroy crypto. It’s global and decentralized. It largely operates outside of U.S. approval and jurisdiction.

But a government can control and restrict the use of crypto within its borders. It can close the bank accounts of crypto companies. And a government can forbid the creation of any and all related businesses.

When China essentially did this, crypto investors simply moved their accounts to other countries.

But what if, say, the U.S., England, the EU and China acted in unison to ban crypto?

It could spell the end of crypto as we know it. At the very least, it would be a major setback.

But even then, it would be premature to write crypto’s obituary. Whether it reached the level of a catastrophic event would depend on what’s happening in a half-dozen hubs, including Korea, Japan and Switzerland, as well as up-and-coming crypto centers like India, Canada, Australia, Brazil, and South Africa.

I suspect crypto would survive and re-emerge down the road.

By the way, this is NOT a likely scenario, at least not in the short term.

The U.S. does not have good relations with many of these governments, and the Trump White House doesn’t mind forging its own solitary path on global issues of the day.

And after Trump? By then, crypto could be too ubiquitous to oppose.

A bearish market. Let me set the stage for this…

The crypto market went up more than 35X last year. Most of the reasons were legit, based on crypto’s massive and very real upside potential.

But the market was also fed by FOMO (fear of missing out) and unexciting returns in the more traditional asset classes. So crypto leaned a little too far ahead of its skis.

It was due for a breather. So what’s the risk involved?

How hard the fall is. And how long it lasts.

As for how hard, we’ve seen the drop already. It was a big one. Bitcoin’s price was halved.

The key is how long the drop will last.

Last year, drops lasted from a few days to a couple of weeks.

On the other hand, in previous years, when bitcoin peaked to less than just $1,000 in late 2013, it took three years for the coin to revisit and then exceed that price.

Could something like that happen again? And if so, what would cause it?

If draconian government measures or a spate of hacks fail to deflate the market, the one remaining X-factor would be a slower-than-expected evolution of blockchain technologies impacting the real world.

Sebastien Meunier calls this dynamic “market fatigue.” I call it the “instant gratification” trap – born of impatience sprinkled with overconfidence.

Disruptive technology of this scale and impact doesn’t happen simply overnight. (See my article here for more of my thoughts on this.)

The Curse Comes at Dawn

So, if these aren’t serious risks, what are?

It’s the curse of being at the dawn of a new technological age.

Everything is so new – the technology, protocols and products.

Think what it was like at the dawn of the consumer electronics age. Remember Sony’s Walkman?

The first mini-cassette Walkman hit the market in 1979. By the early 1980s, they had become wildly popular. But this was mobile music 1.0. Its days of domination began to wane with the introduction of Apple’s iPod in 2001. By 2006, 60 million iPods had been sold.

In 2010, Sony stopped making Walkmans.

We’re in the cryptocurrency 1.0 era.

The technology is still largely unproven. Perhaps bitcoin’s established and growing brand will make it very hard or impossible to replace it with a better crypto.

Perhaps not.

Walkmans didn’t have the extra layer of protection provided by bitcoin’s “network effects.” Then again, bitcoin has a new cryptocoin rival coming out literally three times a week (or more), all of them claiming to do bitcoin’s job better… or cheaper or safer or faster.

Walkmans never faced such intense competition.

I expect the blockchain technology to work and to scale, with cryptocurrencies part and parcel of the success story.

But it won’t necessarily be cryptocurrencies 1.0.

Heck, it may not even be version 2.0 or 3.0.

Let me repeat something I said last year: “We’re basically in the experimental, pre-commercial phase of blockchain technology… Mass consumption is still years away.”

Which is why Adam and I are covering our bases…

The Best of Each Generation

We can’t ignore bitcoin’s status as the gorilla of the crypto world.

Nor can we ignore the fact that many altcoins are developing intriguing technologies that could represent significant upgrades to what bitcoin and some of the older 1.0 cryptocurrencies do.

So, in addition to recommending bitcoin to our followers, we track and recommend the best altcoins we can find.

It’s a strategy that will give us a piece of the action in each generation from crypto 1.0 through succeeding generations.

As we move ahead, we’ll be keeping the best of the earlier generations as they prove their worth. And the ones that don’t? We’ll recommend our members sell them when it’s clear to us that they’ve been superceded by better blockchain technologies.

This is a long-term, multiyear crypto investing strategy – the opposite of a sexier but far riskier (and dangerous) instant gratification mode of investing.
Instead of impatience and overconfidence, our strategy is predicated on open-mindedness, humility, steadfastness and a long-term outlook.

We’re in it for the long haul. It’s not everyone’s cup of tea.

Five years from now, nobody will remember the dip crypto took in the last two days. And, with a portfolio hopefully sporting some big winners, nobody will care.

Good investing,

Andy Gordon
Co-Founder, Early Investing

The post Revealed: The Only Crypto Investment Strategy That Makes Sense appeared first on Early Investing.

Source: Early Investing