https://medium.com/@Zawiasa/the-crypto-markets-correlation-with-traditional-markets-79e8209a6d8 submitted by
At the time of Corona virus and the — not so related
— economic meltdown, many questions the correlation between the virtual economy of cryptocurrencies and the “trad” one.
Why is it such an important question? For many years crypto evangelists predicted Bitcoin as a new safe-haven, the “digital gold”. — Oh boy, they were wrong.
The correlation is not imaginary, trad market players now have significant capital in cryptocurrency and when they need to pull liquidity to cover fiat liabilities, they just do it. The reason for the steep drop in % terms is because the BTC market is not liquid enough at this point in time.
Is it a problem? A heresy of the crypto evangelion?
A heresy for sure, but not a problem at all. Let’s be honest and admit it: The crypto community found nothing unusual in the recent price-drops. I, myself even shorted the market, because crypto is still full of promises but lacking adoption.
Okay, so they are correlating and crypto is full of shit and scammy and basically the same, right? Not so!
Do you remember the times when we had to wait days for a transaction? Paying with wire transfer for something in China was insanely expensive? When merchants preferred cash over credit cards, because of high fees? When you had to hire a broker for investing?
Those times are gone and yes, not because of crypto solved these problems, but crypto definitely accelerated this transformation, urged the financial world to change rules or die. Now what if I say
, this is only the beginning and these are only entry-level benefits of what really crypo promises?
Crypto promises us the “digital America”
Uh, I said it. Crypto is
the new land and all the resourceful wants their own pieces of it. The reason behind why so many are thinking about Bitcoin as the digital gold is because the digital America’s gold rush is happening now
. We all know deep in our consciousness that the world is heavily changing, the youth is changing, society is being digitalized even if brain-computer interfaces are not a thing yet..
Damn son you are weird and I stopped reading here.
The reason you feel weird about our descendants living online is because you know it will happen, but stay in the present now and I will tell you what crypto is doing to our traditional economy!
What is the “crypto dream”?
Many of the early adopters joined not because they wanted to make money, but because they think the current money system is unfair. Common citizens are paying the highest on almost everything and most of the time they don’t know about it. The financial sector’s practices are so hidden, almost like an occult knowledge. There are a few people who understand it and then there are everyone else, the vulnerable. This makes the first statement of the dream:
- Financial systems should be transparent.
One of my biggest frustration as a teenager was I did not see real good opportunities in the world. I read about them, I saw them in historical movies, but in reality workplaces were boring and abusive, investments were only for the rich. Neither the booming housing market or fake forex trading seemed like a good fit for me. I had very little money, but a big passion to forge my fortune.
- Opportunities should be there for everyone.
The wolves of Wall Street created our current system in the ideology of “I own what I could acquire” and backfired each other just like everyone did. They have done this, because there is no trust in the traditional world, but trust is heavily needed. But if things are transparent and open, we only need one more thing to wake up from this nightmare:
- Cooperations should work without trust.
You read it right, a trustless environment provide uncheatable cooperation. There is no single entity that has authority over the system, and consensus is achieved without participants having to know or trust anything but the system itself.
I don’t eat your utopian bullshit! Your software is written by people I still need to trust.
People tend to be happier to direct trust towards organizations than systems. However, while organizations are made up of people who are easily corruptible, trustless systems can be governed entirely by computer code. All of the source code in crypto should be accessible
to everyone. If it is not, then it is not a part of our ecosystem.
The technology behind crypto
Many being confused about the blockchain, thinking it is not a big deal. We had many software far older than Bitcoin, implementing the very same ideas. What Bitcoin had — which made the blockchain a very unique thing — is philosophy. It was intended to use a special way and confronted a very big thing, nobody thought it could be possible to confront.
The blockchain is a way to store information. A decentralized, fully transparent one, which is accessible for everyone 7/24. It never stops, It cannot be stopped and people make it doing different things.
The first use case its inventor made it doing is persisting transactions, money transfers. He told all of us it is just an experiment, which he didn’t tell is the capabilities of this technology. So fast people realized it is possible to do extraordinary things with it, like running a whole computer on the blockchain, making it behave like a virtual computer instance.
No one did things like this before: A global computer which cannot be stopped, which is capable to run all kinds of software on it.
What was the impact?
People go mad about it, especially greedy people who don’t know a bum about the technology but have money to pour in. At one point, the fundraising softwares running on the Ethereum global computer had more impact and volume than the whole VC industry in America. This was only the early rising of crypto, 2017 spring. Later that year, everyone hopped on the train who were brave or stupid enough.
Did crypto had a real economy at that point? Was it an industry? Real-world adoption? NOPE
It was a bitter funny hype train, challenging everyone inside or outside the community, but it showed us one thing: We have the gold.
Not so much people are capable to find and extract gold, to be honest: Most of us are just lurkers, fortune hunters and times could be rough when a mass hype destructs all the mines, but people had keep going, continuing the work.
How the crypto economy relates to the traditional economy now?
It is expanding much faster than any other economy in the world. Our frontiers in adoption are companies like Crypto.com paying hundred millions of dollars ($50 bonus for every new customer
) to onboard millions of users, others like Coinbase paying $166 anyone to motivate
in learning about cryptocurrencies. Handshake is airdropping hundreds of dollars
(on current rates) to open-source developers and these are just a few examples of how generous and prosperous our thriving world is. In comparison: Revolut, a fintech company which is very similar to Crypto.com only paid 10 USD for new card holders and no one would ever pay you to educate yourself about financials. Developers? They historically get a fraction of a fraction of the pie
in Silicon Valley. (Sorry Y Combinator
, you are a delightful exception)
These companies I mentioned are very traditional ones and they are not innovating in software, but keeping our gates open to the new world. I don’t want to credit here any of the thousands of developer teams, all working on the “real deal”. I only leave here a link to the list
of all variants of the Bitcoin source code alone. Understanding what blockchain companies are working on is a whole new profession now.
The idea of a crypto company is the DAO (Decentralized Autonomous Organization). Which covers trustless, often anonymous and fully transparent organizations with profit sharing and they are
aimed to become better alternatives to traditional companies. Most of us in the community have different understanding, proposals and hopes about what a DAO should be, but common sense tell us it is the next big thing to emerge.
Wild West is Happening
We are building railway systems across the land, making connections and interoperations between blockchains. We are attracting a lot of immigrants day-to-day, because we have better paying workplaces, better interest rates and in overall a flourish economy. We are growing a strong identity to support our nation as the blockchain developers, economists, philosophers and investors. Our money is under our control as we own our future and all of us knows: We will soon show the world, what we are capable to achieve.
This is my view of the crypto world. This is the manifesto of “digital America”.
contact me at zawiasa.hu
- As we're all well aware, if we've been mining or trading, is that there are whales present in the cryptocurrency economy. These are high net-worth individuals, parallel to 1%ers of the forex world. While they may not maintain as high a net worth as the elite of 'irl', the relative gaps in market share between them and other users of the market, whether they be newer entrants or just general low net worth individuals. The relativity in market share is emphasized by their movements in markets, and ever since the boom of November '13, they've really been able to apply "money makes money" with all their newfound capital.
- Now, we are also aware that cryptos, while magic pretend internet money, do translate to actual money in the real world. However, whales are severely limited to access of the entirety of their funds. Until regulations and clear laws come about, they cannot withdraw more than a certain amount monthly, lest they warrant a protocol bank notification to the IRS. They would be making far too much money, and thus, the majority of their wealth is locked into assets, much like some wealthier individuals of irl. Many of them are fine with this. Earlier, I called it the crypto economy, and not the bitcoin economy, for a reason. There is a constant flow of wealth and value throughout the infrastructure that we have evolved to, and are presently in. With so many low-volume markets in altcoins, many floating in severe depressions, there is a very easy opportunity to accumulate a percent of a lower-market cap coin's by high net worth individuals who can produce mass levels of volume. Their money is constantly making money, and insight onto this is evident in Wolong's little manifesto. It's obvious, but it should be noted and I wanted to highlight some basic factors:
- Money makes money. It is easier to make your second million than your first million. When you make a 1% positive trade with $1000, you do much more well off than if you were to do a 1% positive trade with $100.
- When your net worth is equal to that of the marketcap of an altcoin, you can do many, many things within that market. Your presence will be felt, if you want it to. You can slam things in a direction or gently push them in that direction. While it varies with overall net worth, you will generally see some levels of diversification habits with whales, because otherwise is dumb. You have very little to gain by going all in, since your withdrawals are limited each month. This, logically, places a hard cap on the utility of moving markets with no shame. By diversifying, you minimize risk, as any high-frequency trading bot can tell you.
- This creates a flow of money, from one crypto to the next, as there is good probability of some whale moving at some point, and thus, some parallel of a forex economy with stock elements, or vice versa depending on who you are. However, this economy is growing, but contained in regards to 'irl' wealth, because there is no upside to breaking tax laws with excessive withdrawals, and very much downside.
So the elephant in the room: NOW HOW DOES THIS RELATE TO AURORA?
Yes, I know. I'm sorry I rambled. I just love thinking about these things.
But anyways, Aurora poses some very, very interesting
implications, given that it is all legitimate and everything will be followed through. It is a coin that, through it's blatant attempt at boosting the adoption curve for crypto, does so through a very exciting method. Aurora is a redistribution of wealth.
No matter how you spin it, it is taking a great concentrated sum of money and giving it away to a population. Given the factors listed above, this wealth is likely inaccessible by some number of partners or even one large single individual (likely cryptillionares) who are involved with aur. If my assumptions are correct and they cannot access their large wealth contained within their assets, then the idea of aur is a fantastic alternative in a chaotic, volatile world moving towards homeostasis. It is taking a small fortune produced by some individuals, and redistributing it. Simultaneously, the increased exposure leads to increased volume, legitimacy, and normalcy for their other coins. Even if every single person cashes out right away, the idea behind this coin will make headlines. This coin is a protest
. It is a protest against failing currencies that are forced upon populations by governments. It is a protest against enemies of crypto. It is a protest against an attack on the freedoms of choice. All this coin presents is a choice to the people of Iceland, and the statement behind that sentiment is unprecedented (well, except for the entirety of crypto, but lets talk on a mass adoption scale). It is everything Occupy Wall Street hoped for, but couldn't accomplish with their whining. Cryptos offer people an opportunity to reject the corruption of their financial institutions, and the false government promises of regulation and justice against wrong-doers. It is a choice to where you will store your net worth, and an opportunity to put it somewhere that won't make someone else rich for "holding it" for you, while you make nothing.
- And so, we see another interesting implication rise: While this coin promotes an acute attempt at a redistribution of wealth, part of it in protest and civil disobedience, it is not communist at all. Hear me out. While this coin poses major social, economic, and political implications, it is not done so purely out of a Marxist dream. This does not promote some fated equilibrium where all share the same wealth. This coin was developed, launched, and promoted for profit, a very capitalist perspective. Many companies can afford sums of money where they distribute some of their product for free, to increase exposure so that, if a good product, adoption will increase. They do not get called commies. What is so radical about this airdrop is that our product is better money. That is why communist undertones are present in this "demo" of cryptocurrencies. Many are subject to the status quo of what is offered by banks, and cryptocurrencies do many of their services better. This is fact. While there are many things banks do that cryptos cannot intrude upon, crypto currencies allow many people to become their own conventional bank. Here, we see again themes of civil disobedience and protest. We see an introduction and nice nudge to what crypto can be, which is what got me so into it. When I saw the Doge party article about that group that 'occupied' wall street and put the Doge head on the bull, I was inspired like never before. Cryptos offer a means of asserting your protest against the financial engineers of our time. So little is understood about what they do, that they are free to 'make money'. That is their product, and it is a result of their trade and their business. They trade in wealth. While there is nothing inherently wrong with that, the abuses present are rage-worthy. Occupy Wall Street was more than justified, but I saw them, like many, as a bunch of whining millenials in economically hard times. I raged when I saw only one site picked up that Doge-on-the-bull story. The idea that cryptos let everything Occupy Wall Street could have been needs to gain exposure to the quantity of people who were in alliance with either the Occupy sentiments or the protests themselves.
Why do I love Aurora so much? It points this all out in brave, stark font. It spells out to opponents of crypto's adoption and skeptics: I do not care for the idea of forced currency. I do not like restrictions of freedom and choice. I am willing to spend millions on an act that shows both how much I believe in the technology of my product and how strongly I want to go against many of the wrong things you stand for.
I am hopeful for the future. I am hopeful for Aur and I am especially hopefuly for crypto, but if this brave experiment results in a quick deflation of Aur's value, rest assured that the noise it kicks up will trickle money into our economy as a whole soon enough.
Sorry for the rambling in parts, but all of this excites me. There is enough injustice in the world, usually in the face of justices enforcers, and so much is enabled by money and wealth. I've both hated it and respected it for as long as I can remember. The fact that crypto gives people a means of asserting themselves against a major tyrannical institution of modern times excites me, and it excites me even more that it is done through unity. It is a unity behind the purity of ideas, statements, and implications found within crypto-participation that excites me, and the fact that it only gets stronger with increased cohesion and faith seems like a small bit of justice in a very unregulated world.
The DayTraders Manifesto by Boris Schlossberg. I recognize that I will make many decisions every trading day I recognize that I every day I will be wrong I recognize that there may be days, weeks and months when I will lose money I recognize that the best traders in the world make 100-200 pips per month You might also find the free Advanced Forex Course useful, as the study of the market wizards is how I put it together. Finally I suggest you focus on self-awareness. Do your best to identify your mistakes and issues that are holding you back and use the manifesto as a framework for solving them. Over to you… Cheers, Sam. About the Author He is a part owner of Forex Signal Provider fxrenew.com (You can get a free trial). If you like Sam’s writing you can subscribe to his newsletter for free. The post The Significant Importance of Having a Trading Manifesto appeared first on www.forextell.com . ‘The Forex Trading Manifesto’ addresses these issues, one by one… you will gain confidence about your relationship in the markets, and how to improve your performance in ways that may be hard to imagine before you read this. The Conservative party published its manifesto over the weekend, which promised no hikes in income tax, VAT, or national insurance, which seems to have gone down with the market and injected a note of bullishness into the FTSE this morning, despite last week’s poorer economic numbers for the UK. FOREX.com is a trading name of GAIN Capital
READ THE MANIFESTO — https://1percentfxmanifesto.com Hey! In today’s video I will show you my winning forex system, step by step how to achieve returns of excess of 100%+ every year! Many ... READ THE MANIFESTO: https://1percentfxmanifesto.com JOIN THE ACADEMY (75% OFF): https://1percentfxacademy.com Hey guys, welcome to this weekly forex forecast and analysis! Today we are going to ... READ THE MANIFESTO — https://1percentfxmanifesto.com Hey! In today’s video I will show you how to trade counter trend in the forex market, and most importantly, how to profit!!! READ THE MANIFESTO — https://1percentfxmanifesto.com Hey! In today’s video I will show you how to analyze forex charts from scratch, and you will be able to take a chart and apply all the ... We make simple videos on HOW TO START TRADING IN the stock market, ETF, Penny Stocks, Swing & Day Trading, Cryptocurrency, Bitcoin, Startups, Real Estate, Fo...