2018-05-21 Week - Central Bank Chatter - Bitcoin - Crypto

This Week

EU holidays on Monday mean that cryptos will have more open interest during EU trading hours.

Expect central bank chatter this week. FOMC minutes will scare markets more than give actual direction to monetary policy. ECB accounts will likely be more in depth without holding any more information.


Bitcoin seems to have found buying support in the low $8k. There is still selling pressure at these levels, which is likely short term trading and not a trend lower. Bitcoin wales are still a threat, but a minor short term threat. So hold with caution, and short only if desperate, but expect a move higher in the longer term.


The high of cryptos came in the middle of media hype. That kind of hype was driving prices on speculation. Similar speculation has driven shares of Tesla and Apple, which is the idea that they are doing something groundbreaking and novel. That probably adds another 20% to the price when the general public buys in without knowing exactly what they have bought. Cryptos are still profound to many people as they don`t use them in everyday life. However, their use is gaining wider acceptance.

Money is anything that can be used as a medium of exchange. On a bank`s ledger, a simple key stroke can turn $10,000 to $100,000. Cryptos, as a decentralized ledger, are forced to rely on market belief to improve value, not money printing like fiat currency. That same belief in the underlying fiat, (or lack of belief) and excessive money printing is why Venezuela and Zimbabwe currencies collapsed. Meanwhile, the USA and Australia are both trying to eradicate $100 notes which will likely follow the currency crisis of India when they abolished larger notes. This will not stem the use of cash in the black market, but instead will lead people to use gold coins or crypto for lager value exchanges that are hidden from governments. Human behavior will continue to find things to supplant money, if need be.

Fear of the new and novel technologies won`t stop wider application because cryptos are a solution to many problems within the financial industries. The older generation sees cryptos as some random digital bits but doesn`t gather that this is the new medium of exchange. Their fears of lost cryptos are the same fears people have about stolen credit cards and identity theft, except that holding crypto is more secure because they don`t have to rely on insecure banks or credit agencies. Just as the internet has woven itself into daily life, cryptos are finding wider adoption.

As industry uses crypto as an exchange and solution, it gains market value regardless of naysayers. Wider adoption is happening, regardless of the general population`s understanding of how blockchain functions. So long term, cryptos are still a good investment.

In the short term, media hype will continue to drive price action. This is just as you`d expect from share prices and commodities. Those minor perturbations won`t stall the price action.
















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Henry Ledyard is an independent trader. He has NO affiliations with banks, brokerages, funds, trading houses or markets. He trades for himself and posts trading ideas merely to share information. He does NOT want your money, advice or opinions. He does NOT want your unsolicited emails. If you require further financial advice, seek it elsewhere. Henry`s opinions should be considered as addled as his blog site: