This analysis is going to have more to do with a POSSIBLE scenario that could play out and how it would unfold next week. This is more about the WHY of how a scenario could unfold. Couple disclaimers: I am NOT short right now, my BIAS for this POSSIBILITY IS. I am in all CASH right now on my trading account. I do have some long-term investments, but thats different from trading
On Monday the SEC is gathering together to talk about whether Crypto should be classified as a Security, specifically Ethereum . Here is one thing I am 100% certain of:
The SEC, FINRA, CFTC, CBOE , etc... views crypto and ETH as a SECURITY. There is doubt they do, BUT it meets every definition of being a security, why people think otherwise is beyond me.
there is a bias right now that if it gets called a security that we are going to go plummeting down and everyone is going to dump. This is why I am in CASH. It's risk vs reward. If I miss a 10% move on the upside to save myself a potential 40-50% drop. That's fine by me. Remember, after a 50% drop, it takes a 100% return to make that up. i don't know how the hearing is going to play out, the SEC already has a bias that crypto security, so why is there this "mysterious" shroud of how they are going to be classified is beyond me. It makes ZERO sense. They will classify them as securities, its just a matter of WHEN. If you are saying "Sherem that's non-sense" I say, look at all the big players pushing for it. Gemini is partnering with Nasdaq. Coinbase came out with an Index to attract institutions. Goldman bought Poloniex via The Circle. the list can continue. They recognize that this technology is revolutionary and they feel you need price stability to make it effective. Regulation, options, and are how you do it. The big players make money off of crypto being used, traded, it doesn't matter if the price goes up or down for them. You need to recognize that.
Let me iterate. THIS IS A POSSIBLE SCENARIO that this thing could plummet on Monday. I posted my technical view in another chart, see below. if you are profitable, I would recommend taking half off the table and put a stop on the rest to lock in, ideally below that trendline. Read my for a little more detail
It's better to be out of the market wishing you were in, then in the market wishing you were out.
"This analysis is going to have more to do with a POSSIBLE scenario that could play out and how it would unfold next week. This is more about the WHY of how a scenario could unfold. Couple disclaimers: I am NOT short right now, my BIAS for this POSSIBILITY IS. I am in all CASH right now on my trading account."
Under the Howey Test, a transaction is an investment contract if:
1) It is an investment of money
2) There is an expectation of profits from the investment
3) The investment of money is in a common enterprise
4) Any profit comes from the efforts of a promoter or third party
It could very well be argued that crypto meets those 4 criteria. You invest money, you expect profits, it's common enterprise and third parties profit and it gets promoted. ICO's especially. the last one you could say no one promotes bitcoin specifically to get gain and that would be the gray area between currency and security since it's decentralized. But one thing is for certain, they will regulate it.
any new updates? I'm Brazilian and I've been following your ideas, keep posting, thanks, hugs