I have been in technology a long time & a trader even longer. I started trading at 15 (nearly 22 years ago now) and become a VC investor in 2014. Bought my first BTC in 2011. And manage funds in and around financial technologies (Fintech). The reason I share this with you, is that I see from experience in both the investing and technology space, what I feel we need to obtain global adoption, acceptance and overall growth.
Where it started?
Go back to the inception of Bitcoin , the idea was simply to make a better P-2-P (Peer to Peer) transaction system, in essence taking out the middle man, giving the end user more freedom and ideally reducing costs.
Why is this important?
Whilst the control is a big element and a benefit for crypto – having private keys and personal wallets, the trust and fear also needs to be considered. Back in the early days, most investors saw the technology as risky and the threat of hacks a huge turn-off to the digital currencies. Where banks had the upper hand was in the stability, assurances, regulation and all of this give comfort to the investor. (my money is safe).
The Government’s perspective…
Well in simple terms, the government want control (without going down a rabbit hole) they are controlled by the bankers on Wall-Street, and the system is designed to keep the middle class – well, in the middle. Regulation as a blanket has yet to have been done. But there have been some major strides towards things like KYC (Know your customer) and AML (Anti Money Laundering) put into companies, exchanges and the likes that were not mandatory early on.
Whilst some see this as negative, it’s actually counter intuitive to see it as a downside. Yes, it fits under the umbrella of Government control (Big brother watching), but in simple economics, the same regulation will attract more and more institutional money, drive more and more industry adoption across all sectors. A lot of the privacy factors are all ready gone, when looking back at what it was back then, compared to where we are today. Most of the major exchanges now have their own governance imposed on them by the local authorities.
Now in this side of things, we also need to consider the cause and effect this will have on the charts. In a tale as old as the market itself we have market cycles which consist of Peaks and troughs. Which are patterns that are developed by the price action and is experienced by all securities. Including Crypto.
Games being played
The major issue without regulation is that companies & individuals are free to play games, we have recently seen exchanges being investigated for trading against their clients. We have had data being sold externally to trade against custodians, we have also seen acquisitions of fraud and tax sleuths. To name just a few issues.
A personal experience and gripe of mine was in 2018 I signed up for a pre-paid debit card, to test this I put $100 into it, but in doing this I needed to first buy the BTC , send that from wallet A to wallet B and then the money sat on an application. After fee’s the money left was around $56 so from the hole in the wall I could only retrieve $50.
This is not healthy for mass adoption & without regulation it is unlikely to change fast enough to really challenge the payment system of the world.
So, although the ‘Masses’ in this case ‘Retail’ do not like the global situation of the government controls and restrictions, the industry is fuelled by fear of missing out and greed of mass wealth. This includes the likes of the exchanges and servers to interact within the crypto eco-system. By this I mean the whole purpose of crypto is empower the people and reduce fees. However, the issue is less regulation and more fees, scams and general lack of CONFIDENCE in the crypto sphere. If $100 is put into a HSBC , Citi bank or Standard Chartered check-in account. You would expect to take $100 from the hold in the wall.
I expect growth in the industry as a whole, but as an experienced trader I have to be realistic on the timeframes and the situation. When assessing the chart, you can go back to March this year when I was calling the top of the latest cycle.
and the outcome;
If we are only now seeing the weekly 3-4 move and indeed on the way 4 to 5 – then we should not be disappointed in a top that only stretches just beyond the current ATH and drops again heavily for its monthly 3 to 4 move.
Other areas of concern for vast growth
We have seen the rise of NFT’s recently (even launched two of my own) but whilst the logic is sound and ideal for content creators and artists, again the issue is “cost” Gas fee’s can be so expensive, taking the logical benefits for artists away from the spotlight, instead of encouraging them to flourish.
When combining all of the above, I feel we might attract some interesting regulation changes at the high of the moves, this will cause panic and sell off in the retail sector. The industry will likely recover and then we get the MOON-shot people are longing for.
When analysing the shorter-term stuff people tend to miss the larger point – instead focusing on , or chart patterns;
When in doubt – zoom out. The story is already written in the price action, it will now take the news to catch people up with the actual situation.
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
NFT 's - NOT REKT;