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Crypto Bubbles & Why Traders Think Altcoins Are Overpriced

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Crypto Bubbles &amp

The topic of crypto bubbles has been a long one, stretching to many sections of our latest cryptocurrency news. The truth is, cryptocurrency is a community that is no stranger to accusations of it being a bubble. If we go back in time, we can see that the entire bubble trend started in 2014 when people described Bitcoin (BTC) as a bubble – after a Financial Times article from September (that year) contained the ill-fated prediction saying “We’re going to stick our neck out at this stage and call this the end of Bitcoin.”

However, that obviously did not happen. Many best cryptocurrency news sites showed that crypto bubbles are only a discussion and a rumor. Bitcoin certainly did not end in 2014 – instead it came back stronger and continued to rise over the following years. And while certain mainstream observers regard the entire market as one giant balloon – others see altcoins as crypto bubbles which are reflecting the biggest bubble out there, Bitcoin.

One veteran trader and author named Peter Brandt was in the coming altcoin news recently for comparing the altcoin market to the dot-com bubble and claiming that Bitcoin’s recent strong rallies won’t be replicated by other cryptocurrencies. Similar to him, the CEO of ShapeShift Erik Voorhees argued last year that Bitcoin and altcoins form two separate markets.

The crypto bubbles may be there – but they are not as strong as many describe them. For instance, what’s stronger is the fact that Bitcoin increased its price by around 130% over the last three months – and Ethereum grew by 81% in the same period.

However, Brandt thinks the opposite and believes that altcoins are crypto bubbles. As he said in a tweet at the end of June:

“I believe that the advance in late 2017 and early 2018 in altcoins will prove to be bubbles. I am of the firm belief that 95% of alt-coins will eventually be worthless and that BTC will occupy 80% to 90% of the total market cap of cryptocurrencies. No doubt several of the altcoins and macro-cap coins will find utility in specialized niches. It remains to be seen which coins these will be.”

Another believer in this theory is Max Keiser, who was featured in a CNBC interview for stating:

“The dominance index is at 60% again, and it’s going back to 80% or 90%. Because that’s the only logical place for anyone who wants to be in crypto to be. But the short answer is, in my view, the altcoin phenomenon is finished.”

However, it is worth considering the question of whether the cryptocurrency market is a whole unity and draw conclusions from it – instead of distracting ourselves with crypto bubbles.

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One BitMEX Trader Sells $10M, Ignites Talks About Further Dumps

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The whales on the world's largest Bitcoin margin trading platform BitMEX have started selling large amounts of BTC. The crypto news today show us that after the rejection at $9,200, investors are moving towards hedging their holdings to brace for a bigger pullback. One BitMEX trader recently sold $10 million of his stakes, igniting the talks about more dumps coming in very soon.According to the @WhaleTrades Twitter profile, there have been many whales selling millions of dollars worth of Bitcoin in the past 24 hours. The one particular trade which is interesting is the $10 million worth of BTC sold at $8,665 by the mysterious trader.https://twitter.com/WhaleTrades/status/1219074057834057728Whales selling Bitcoin on BitMEX, as indicated by WhaleTrades, basically means spot sell orders at 1x leverage. This is very similar to selling Bitcoin to the US dollar on Coinbase or Binance in that investors are buying synthetic USD on BitMEX in order to hedge.
“Many of you may not know this, but if you want to eliminate your bitcoin exposure without actually going through the process of converting to fiat you can move your holdings into synthetic USD on BitMEX by shorting with 1x leverage,” top trader known as “Flood” explained.
Hence, a $10 million sell order on BitMEX as noted on whale account tracking bots is equivalent to an investor selling $10 million worth of Bitcoin to USD in spot. The filing of large sell orders in the past 24 hours by whales indicates that the market is anticipating a pullback for BTC in the short-term.On January 19, the Bitcoin price news showed that the BTC price rose to as high as $9,200 across major trading platforms but this upsurge was quickly rejected. Before the one BitMEX trader sold his $10 million, the BTC price rose to as high as $9,200 across major trading platforms.However, it was only a few minutes time when the Bitcoin price dropped by 6% and to as low as $8,430 on BitMEX. The general sentiment of traders in the past two days has been that after a sell-off, another spike for Bitcoin can be expected before the big drop.Many traders started favouring the idea of BTC being unable to escape the bearish trend now. According to theories, the only bullish scenario for BTC in which the dominant coin continues its extended rally is if the monthly candle closes above a high resistance above $9,500.
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Venezuelan President Orders State-Run Firm To Sell 4.5M Oil Barrels For Crypto

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The Venezuelan President Nicolas Maduro has decided that the country will soon sell oil from reserves of a state-run oil and gas company for its national oil-pegged cryptocurrency, the Petro (PTR). As we can see from the altcoin news and rumors today, the president of the country signed a decree to sell 4.5 million barrels of oil from the certified 30 million barrel reserve maintained by Petroleum of Venezuela (PDVSA) as the state-owned company announced on January 14.According to the reports from PDVSA, the Venezuelan President Maduro announced the news in a speech before the Constituent National Assembly - elected in 2017 to draft a new constitution for Venezuela.Once the initial sale of 4.5 million barrels is completed, we will see the firm selling 50,000 barrels per day - all denominated in Petros - as an "exploration mechanism" for the oil-backed stablecoin. Maduro also noted that the trial will be vital for the consolidation of Petro and stated:
"We are preparing for the second phase that will allow more efficient use of cryptocurrency.”
Moreover, the Venezuelan President Maduro decreed that all airplane fuel used for covering international routes should be sold for Petros. The president said that this scheme will allow Venezuela to "open roads to the new economy" and build "a world of peace and integration of peoples, their happiness and improvement.”Maduro also noted that the Petro will be an important tool for the country's fight against the mafia. According to one Venezuelan writer and journalist named Maibort Petit, the Venezuelan President Maduro said:
“A lot of people don't want to switch to the Petro because they have their business in dollars. Mafia and other thieves don’t like the cryptocurrency because it cuts off their hands.”
Many analysts have reportedly took it to Twitter to comment the latest decision of the Venezuelan president in the cryptocurrency news. A lot of people now claim that the Petro is a "robbery disguised under 4.5 million barrels" and some of them argued that selling oil from the country's national reserves violates the constitution of Venezuela.As we reported in November 2019, the Venezuelan President Maduro cut the Petro's backing from five billion barrels of oil to 30 million - a decline which was allegedly a result of the United States sanctions on PDVSA.
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The Main Industries Which Are Expected To Propel Crypto Growth In 2020

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Bitcoin enters its twelfth year in 2020 and the past eleven years have been offering a meaningful amount of time to identify the key trends which have emerged around cryptocurrencies and blockchain technology. As we can see from the latest cryptocurrencies news, the market situation is stable and many coins are in a good position, recording gains from 30% to 60% this year alone. The main industries which will benefit from this cryptocurrency growth and rapid acceleration are now more different than ever before.BankingThe tightly regulated world of banking could open up to the concept of cryptocurrencies even more soon. In 2019, we saw a lot of progress in this industry. One example came from Switzerland, where the banking regulators made headlines with their desire to become the home of Initial Coin Offerings (ICOs) and introduced initiatives to encourage the big banks to start trading and storing Bitcoins.EntertainmentFrom NBA teams to sports icons and casinos, a lot of entities are accepting Bitcoin or becoming advocates of it as a form of both wager and prize for years. Now, betting on international lotteries can be done with e-currencies. The digital nature of the modern gambling industry also means that casinos are one of the main industries where BTC can see its full advantage.TravelBelieve it or not, the crypto revolution also entered the travelling industry with the main advantage of having a truly borderless form of currency for both businesses and consumers. The blockchain news showed many examples of big travel brands accepting the technology - and the same could happen to Bitcoin soon.Examples include Winding Tree and Noah Coin, both of which are projects that credited blockchain and crypto with allowing them to avoid charging customers commission fees, thereby keeping their services more affordable.PropertyLast but not the least in the main industries accepting crypto is property management. A lot of people are already listing their properties exclusively in Bitcoin (BTC), Litecoin (LTC) or Ethereum (ETH) - especially in the tech-heavy regions such as the Bay Area, Greater London and Silicon Valley.Even though crypto is still seen as the upper end option of the global property market, this may change soon as more consumers turn to e-wallets.
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South Korea Considers A 20% Income Tax On Cryptocurrencies

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The latest Bitcoin and altcoin news take us to South Korea, where the Ministry of Economy and Finance is considering imposing a 20% tax on income from all cryptocurrency transactions. This is all part of a report published by the local English-language news outlet The Korea Times on January 20, showing that the ministry had ordered its income office to review cryptocurrency taxation. As it stands, South Korea considers the new tax and even though the plan is not finalized, the government is serious about the 20% tax on crypto income.News of the proposed rate also follow the reports from earlier this month which showed that South Korea is drafting a tax regime for profits made from trading cryptocurrencies. Right now, many are speculating that the government may categorize gains obtained through crypto trading as "other income" and not capital gains. This category also includes gains made from lectures, lottery purchases and prizes.As South Korea considers a 20% income tax on crypto, it is evident that a clear scheme is much needed in the country. This became apparent when at the end of December and just before 2020, the major cryptocurrency exchange Bithumb announced that it was considering administrative litigation over an $68.9 million tax bill which it believes has no legal basis.Recent reports also indicated that the firm decided to follow through and take the tax authorities to court. As we previously reported in our cryptocurrency news and guides, the cryptocurrency regulation in South Korea has seen significant developments ever since Park Yong-Jin, a member of the National Policy Committee from the ruling Democratic Party, introduced the first ever taxation policy for crypto in 2017.In 2019, the National Assembly's national policy committee was also in the news for approving a bill that would give more legitimacy to digital assets by subjecting them to more scrutiny and government oversight. Three years later, we can see that South Korea considers the 20% income tax bill on crypto and is serious about its plans.The idea of an income tax is not spread everywhere but in South Korea comes during a phase when the market is gradually increasing. Bitcoin, for instance, managed to gain around 40% this month alone and despite the recent correction, has been a profitable investment for many traders.
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