First I would like to write about the number of days with more than -10%,-15%, -20% volatility in 2021:
When you are looking at the total cryptocurrency market in 2021, you will notice in the past 266 days we have had 23 days with -10%, 11 days with -15%, and 5 days with -20% or more decline in the total cryptocurrency market cap.
for Bitcoin these numbers are: -10%(15 days), -15%(9 days), -20%(2 days), and for Ethereum is , -10%(30 days), -15%(11 days) and -20%(8 days).
I would like to call the day, washout days because if you consider leverage, more than 10% decline is enough to washout many ..!
I believe these numbers clearly show Cryptocurrencies are highly volatile and speculative digital assets, because:
The cryptocurrency market could experience more than a 10% decline every 11.5 days.
Bitcoin could experience more than a 10% decline every 17.7 days.
Ethereum could experience more than a 10% decline every 8.8 days.
this level of volatility will cause problems for cryptocurrencies in the future unless they become more stable which makes them less favorable for traders..!
Why Currencies Have Value
Currency is usable if it is a store of value, or, to put it differently if it can reliably be counted on to maintain its relative value over time and without depreciating. In many societies throughout history, commodities or precious metals were used as methods of payment because they were seen as having a relatively stable value.
Currencies have value because they can function as a store of value and a unit of exchange.
Successful currencies have six key attributes—scarcity, divisibility, utility, transportability, durability, and counterfeit ability.
The cryptocurrency Bitcoin has value because it holds up very well when it comes to these six characteristics, although its biggest issue is its status as a unit of exchange because most businesses have yet to accept it as payment.
The reason behind the 500 K scenario:
Bitcoin's utility and transferability are challenged by difficulties surrounding the cryptocurrency storage and exchange spaces.
However, if Bitcoin gains scale and captures 15% of the global currency market (assuming all 21 million bitcoins in circulation), the total price per bitcoin would be roughly $514,000.
I do not believe Central banks let bitcoin gains 15% of the market and if it happens, it means Ethereum has another 10% share of the market!
Today, Bitcoins at its lowest cryptocurrency market dominance has 41.6%, I believe 514K can not happen because it means cryptocurrencies should have more than 50% of the global currency market..!
at this moment US dollar share of the central banks' reserve is 59%..!
You calculate the numbers for yourself and see if 500k could be realistic..!
Reference article:
https://www.investopedia.com/ask/answers/100314/why-do-bitcoins-have-value.asp
https://blogs.imf.org/2021/05/05/us-dollar-share-of-global-foreign-exchange-reserves-drops-to-25-year-low/
When you are looking at the total cryptocurrency market in 2021, you will notice in the past 266 days we have had 23 days with -10%, 11 days with -15%, and 5 days with -20% or more decline in the total cryptocurrency market cap.
for Bitcoin these numbers are: -10%(15 days), -15%(9 days), -20%(2 days), and for Ethereum is , -10%(30 days), -15%(11 days) and -20%(8 days).
I would like to call the day, washout days because if you consider leverage, more than 10% decline is enough to washout many ..!
I believe these numbers clearly show Cryptocurrencies are highly volatile and speculative digital assets, because:
The cryptocurrency market could experience more than a 10% decline every 11.5 days.
Bitcoin could experience more than a 10% decline every 17.7 days.
Ethereum could experience more than a 10% decline every 8.8 days.
this level of volatility will cause problems for cryptocurrencies in the future unless they become more stable which makes them less favorable for traders..!
Why Currencies Have Value
Currency is usable if it is a store of value, or, to put it differently if it can reliably be counted on to maintain its relative value over time and without depreciating. In many societies throughout history, commodities or precious metals were used as methods of payment because they were seen as having a relatively stable value.
Currencies have value because they can function as a store of value and a unit of exchange.
Successful currencies have six key attributes—scarcity, divisibility, utility, transportability, durability, and counterfeit ability.
The cryptocurrency Bitcoin has value because it holds up very well when it comes to these six characteristics, although its biggest issue is its status as a unit of exchange because most businesses have yet to accept it as payment.
The reason behind the 500 K scenario:
Bitcoin's utility and transferability are challenged by difficulties surrounding the cryptocurrency storage and exchange spaces.
However, if Bitcoin gains scale and captures 15% of the global currency market (assuming all 21 million bitcoins in circulation), the total price per bitcoin would be roughly $514,000.
I do not believe Central banks let bitcoin gains 15% of the market and if it happens, it means Ethereum has another 10% share of the market!
Today, Bitcoins at its lowest cryptocurrency market dominance has 41.6%, I believe 514K can not happen because it means cryptocurrencies should have more than 50% of the global currency market..!
at this moment US dollar share of the central banks' reserve is 59%..!
You calculate the numbers for yourself and see if 500k could be realistic..!
Reference article:
https://www.investopedia.com/ask/answers/100314/why-do-bitcoins-have-value.asp
https://blogs.imf.org/2021/05/05/us-dollar-share-of-global-foreign-exchange-reserves-drops-to-25-year-low/
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Use the following link to access trading ideas: patreon.com/SniperTraderStocks?utm_medium=unknown&utm_source=join_link&utm_campaign=creatorshare_creator&utm_content=copyLink
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.