Reasons why you should NOT trade cryptocurrencies

Opinion: This is where we are in the life cycle of cryptocurrencies
https://www.marketwatch.com/story/this-is-where-we-are-in-the-life-cycle-of-crypto-currencies-2017-12-22

As of December 2017, we are right in the speculators phase. Everyone buy crypto. Everyone is making profit. Even my 85+year-old granddad has a strong crypto investment track record. Everyone seems to have a friend who is doing crypto day trading and now is a millionaire. But no one really knows what is a coherent product market fit for the technology and if the tech can actually support real-world use cases.

Even the two advanced projects, bitcoin and ethereum, are still in “beta mode”:

• Bitcoin: It has become expensive and slow to transact. Even though the number of transaction grows, it is very far from being able to be a real medium of exchange. The recent forks try to provide alternatives and new updates such as lightning aim to enhance the network capacity.

• Ethereum: The only disruptive-use case ethereum has brought so far is token launch/initial coin offering. It has somehow disrupted early-stage financing. But that’s pretty much it. When people starts to trade/purchase too many “cryptokitties” (a pokemon-style game run on ethereum), the network clogged. Yes. I know. Awkward. But cool updates like lightning, sharding etc.. are soon coming to market.

'When is the real money coming to crypto?'

Self-regulation at its best... or not?
The Wild West of cryptocurrencies: 'Be law unto thyselves.'

Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter. If we find evidence of any employee or contractor violating our policies — directly or indirectly — I will not hesitate to terminate the employee immediately and take appropriate legal action.

https://blog.coinbase.com/our-employee-trading-policy-at-coinbase-1d4e860b7837

When all world currencies are converted to cryptocurrencies, this thread's title 'Reasons why you should NOT trade cryptocurrencies' will become ludicrous.

I revel in the day!

Israel Government Considering National Cryptocurrency (4 HOURS AGO)
https://cointelegraph.com/news/israel-government-considering-national-cryptocurrency

BREAKING: Russia Issuing ‘CryptoRuble’ (OCT 15, 2017)
https://cointelegraph.com/news/breaking-russia-issuing-cryptoruble

Putin Condemns Bitcoin, Calls for Russian Ban of Digital Currencies (OCT 10, 2017)
https://cointelegraph.com/news/putin-condemns-bitcoin-calls-for-russian-ban-of-digital-currencies

Reuters Investigates: Crypto Casino
https://www.reuters.com/investigates/section/crypto-currency/

As binary options shuts down, some ex-operatives turn to cryptocurrency

As securities chief worries about new iteration of fraud, a speaker at a Tel Aviv meetup enthuses, ’It’s the Wild West. No one knows what's going on. You can do whatever you want’

...in recent weeks, some Israeli experts have been sounding the alarm that cryptocurrencies may be the next binary options — in other words, the next multibillion dollar fraud committed by Israelis against unsuspecting targets all over the world.

‘We’re very concerned about ICOs’

In a recent interview at the Israel Securities Authority headquarters in Tel Aviv, Hauser told The Times of Israel there are several things that worry him about the new cryptocurrency craze.

“When we talk about cryptocurrencies, we’re talking about several things,” he said. “First, there’s blockchain technology. That’s a very legitimate technology that is going to cut costs and conquer the world. Then you have bitcoin and cryptocurrencies. There are thousands of different digital coins. And then there are ICOs.”

“We’re very concerned about cryptocurrencies because the phenomenon exhibits many signs of a bubble. Someone will tell you to buy this or that token because its value is going up, but you don’t know who is behind the token, and you don’t know who is behind the demand, who is behind the supply. And if something goes wrong, there is no one to turn to.”

Hogeg pointed out that today cryptocurrencies have just three practical uses in peoples’ daily lives: as an instrument for financial speculation, as a way for entrepreneurs to raise money, and, third, as a way for criminals to transfer money to each other.

https://www.timesofisrael.com/as-binary-options-shuts-down-some-ex-operatives-turn-to-cryptocurrency/

Unidentified trader bets $1 million that bitcoin will reach $50,000 (Dec 21, 2017)
https://www.marketwatch.com/story/unidentified-trader-bets-1-million-that-bitcoin-will-reach-50000-2017-12-21

If bitcoin BTCUSD is below $50,000 on Dec. 28, 2018, the options will expire worthless, and the $1 million will be lost. If bitcoin rises above that level, the options will give their owners the right to buy 275 bitcoins for $50,000 apiece—a transaction that would cost about $13.8 million.

Opinion: Bitcoin, because of massive borrowing, could crash the financial markets (Dec 23, 2017)
https://www.marketwatch.com/story/bitcoin-because-of-massive-borrowing-could-crash-the-financial-markets-2017-12-22

Bitcoin mania is starting to look like a religion.

I say that because both bitcoin BTCUSD and religion involve faith in the unknowable. Some bitcoin investors believe the cryptocurrency, along with the underlying blockchain technology, will be a vital part of a new, decentralized, post-government society.

I can’t prove that won’t happen — nor can bitcoin evangelists prove it will. Like life after death, they can only say it’s out there beyond the horizon.

If you believe in bitcoin paradise, fine. It’s your business … until your faith puts everyone else at risk. As of this month, bitcoin is doing it.

Why Bitcoin Can’t Be Money (DECEMBER 12, 2017)
https://www.mauldineconomics.com/connecting-the-dots/why-bitcoin-cant-be-money

Opinion: Heed Warren Buffett’s warning: bitcoin is pure FOMO (Dec 26, 2017)
https://www.marketwatch.com/story/heed-warren-buffetts-warning-bitcoin-is-pure-fomo-2017-12-26

THE GREAT CRYPTO CONSPIRACY? -- Chris Duane (Sep 28, 2017)

Opinion: Bitcoin is still a good bet as long as greater fools are buying (Dec 13, 2017)
https://www.marketwatch.com/story/bitcoin-is-still-a-good-bet-as-long-as-greater-fools-are-buying-2017-12-13

Opinion: Yes, the rise of bitcoin has all the hallmarks of a disaster waiting to happen (Dec 13, 2017)
https://www.marketwatch.com/story/yes-the-rise-of-bitcoin-has-all-the-hallmarks-of-a-disaster-waiting-to-happen-2017-12-12

SEC Public Statement: Statement on Cryptocurrencies and Initial Coin Offerings - SEC Chairman Jay Clayton (Dec. 11, 2017)
https://www.sec.gov/news/public-statement/statement-clayton-2017-12-11

Yes, now almost all of are making money (the buyers); but I am afraid because, the uptrend looks like an unrealistic bullish trend! Anytime it can flow in the opposite site! So, I am stay away from it.

There's a 'fatal' flaw in cryptocurrencies which means they can never be real currencies (DEC 1, 2017)
https://www.businessinsider.com.au/bitcoin-cryptocurrency-ubs-wealth-management-economist-paul-donovan-2017-11

Bitcoin: The World's Most Dramatic Bubble Ever? (Nov 10, 2017)

Bitcoin loses nearly half its value in $187 billion wipe-out as crypto correction continues (DECEMBER 23, 2017)
https://www.news.com.au/finance/money/investing/bitcoin-loses-nearly-half-its-value-in-187-billion-wipeout-as-crypto-correction-continues/news-story/fc40b9f1b11d07011c0b95dc7659bfa1

Matt, It's quite interesting that you spend so much time digging up 'dirt' on bitcoin and cryptocurrencies considering your public fx systems all fail.

So I don't understand what you are doing here? Why advocate for a failed system (fx)?

Or maybe your profitable fx systems are not public.

johndoe2016 posted:
Matt, It's quite interesting that you spend so much time digging up 'dirt' on bitcoin and cryptocurrencies considering your public fx systems all fail.

So I don't understand what you are doing here? Why advocate for a failed system (fx)?

Or maybe your profitable fx systems are not public.

Hi John,

The topic of this thread is 'Reasons why you should NOT trade cryptocurrencies', however for the benefit of all readers I will humour you by answering your questions and hopefully satisfy your curiosity:

1. I would refer you to my first post for an explanation as to why I created this thread;
2. You may consider 'fx' ('foreign exchange' trading) a 'failed system', but I do not;
3. I do not share all my 'fx' accounts for a variety of reasons, but especially to avoid undue attention.

I encourage you to post useful information for the community. Any personal questions are best directed by PM.
Any news supporting cryptocurrency can be posted in Leo23's thread. Thanking you for your consideration.

Regarding the article in post no 1

https://protradingresearch.com/2017/12/14/one-bank-believes-it-found-the-identity-of-who-is-propping-up-the-bitcoin-market/

I think it is fair but not more than that.

If you look at https://coinmarketcap.com/exchanges/volume/24-hour/

and

https://coinmarketcap.com/currencies/bitcoin/#markets

then JPY is not that big a deal today as it used to be. Now Korea seems to be a much bigger player than Japan.

The statement

'Cryptocurrency such as Bitcoin that have pure distributed systems do not have an underlying value like precious metals. Value is not guaranteed by an issuer because there is no issuer.'

You could say this is true but this is also true when stated about the national currencies in Zimbabwe, Venezuela etc.

So saying bitcoin has no value whatsoever is false.

The main problem now is people are looking too much at the price than building something that actually works and is good for people.

BTC lately has enormous fees and is slower than SEPA EUR transfers so the utility of it is getting close to 0%.

Also regarding FX then the main problem in fiat currency systems is the debt tied to it - which will never disappear in a million years. No matter which politician promises to eradicate it.

Painting something as 100% bad or good as the media tries so hard to do, is one of the most unintelligent things I have encountered so far and articles that do not cover all bases belong in the dustbin.

The thing about cryptocurrencies in general is that a lot of people with libertarian stances are getting a chance to show whether something like this can work without a centralized issuer that can intervene etc.

The central bank system is fine but 0% interest forever is not healthy + the debt is enormous + it is controlled by politicians which are out-of-touch with everyday-Joe's issues.

BTC will probably be the start of the next financial crisis but so it is in capitalist systems with their boom-and-bust cycles that go on forever.

BitUSD is a cryptocurrency that tries to solve the 'stable' currency problem.

South Korea mulls bitcoin exchange shutdown to quell speculative frenzy (Dec 28, 2017)
https://www.marketwatch.com/story/south-korea-mulls-bitcoin-exchange-shutdown-to-quell-speculative-frenzy-2017-12-28

Bitcoin tumbles 10% as South Korea moves to curb crypto trade (Dec 28, 2017)
https://www.marketwatch.com/story/bitcoin-tumbles-almost-10-as-south-korea-moves-to-curb-crypto-trade-2017-12-28

Bitcoin drops 11% as South Korea moves to regulate cryptocurrency trading (Dec 29, 2017)
https://www.cnbc.com/2017/12/28/bitcoin-drops-11-percent-as-south-korea-moves-to-regulate-cryptocurrency-trading.html

Bitcoin buyer beware: The crypto carnage could continue, says a real currency strategist (22 Dec 2017)
https://www.cnbc.com/2017/12/22/bitcoin-buyer-beware-the-crypto-carnage-could-continue-says-a-real-currency-strategist.html?recirc=taboolainternal

S. Korea Plans Measures To Curb Virtual Currency Speculation (12/28/2017)
https://www.rttnews.com/story.aspx?Id=2847771

johndoe2016 posted:

'Cryptocurrency such as Bitcoin that have pure distributed systems do not have an underlying value like precious metals. Value is not guaranteed by an issuer because there is no issuer.'

You could say this is true but this is also true when stated about the national currencies in Zimbabwe, Venezuela etc.

Precisely why there are no major active interest in trading Zimbabwe or Venezuela currencies because any attempted valuation of them is highly subjective and unreliable.

johndoe2016 posted:
So saying bitcoin has no value whatsoever is false.

The general narrative on Bitcoin is that it lacks intrinsic value not that it lacks value. There is a big difference in meaning. Currently the value is driven by greater fools and eventually even the supply of fools run out even if there is one born every minute. Such valuation eventually disappears quicker than it emerges because fear outranks greed any day.

johndoe2016 posted:
BTC will probably be the start of the next financial crisis

Do you have any evidence to back up such a rhetorical statement?

johndoe2016 posted:
BitUSD is a cryptocurrency that tries to solve the 'stable' currency problem.

If providing stability is its goal then it has failed miserably.

@johndoe2016 @Dove777
Thanks for your contributions.

India's finance ministry on Wednesday issued a warning against trading and transacting in crytpocurrencies such as Bitcoin, saying they do not have any intrinsic value and likened them to Ponzi schemes.

India Equates Cryptocurrencies To Ponzi Schemes In Warning (12/29/2017)
https://www.rttnews.com/story.aspx?Id=2848107

Hmmm...

Not everyone is so bullish. Roy Sebag, who said he first invested in bitcoin in 2011, said he sold most of his 17,000 bitcoin between May and June because he believes the long-term value will be zero. “It’s completely devolved from the original promise,” said Sebag, founder and chief executive officer of Goldmoney, which oversees about $2 billion of assets. “Bitcoin and cryptocurrencies in general are exhibiting a mania, fueled by speculative fervor.”

Wall Street Keeps Valuing Bitcoin Higher and Higher (August 21, 2017)
https://fortune.com/2017/08/21/bitcoin-analysts-price-forecast/

IRRATIONAL EXUBERANCE - Robert Shiller wrote the book on bubbles. He says “the best example right now is bitcoin.” (September 05, 2017)
https://qz.com/1067557/robert-shiller-wrote-the-book-on-bubbles-he-says-the-best-example-right-now-is-bitcoin/

Novogratz Says Crypto Will Be ‘Biggest Bubble of Our Lifetimes’ (November 29, 2017)
https://www.bloomberg.com/news/articles/2017-11-28/novogratz-says-bitcoin-to-win-out-over-other-digital-currencies

BUZZKILL - Bitcoin bull Novogratz thinks it could plunge to $8,000 (December 22, 2017)
https://qz.com/1164278/bitcoin-plunge-former-goldman-sach-trader-novogratz-warns-the-cryptocurrency-has-much-farther-to-fall/

CRYPTOCRAZE - Beverage companies are juicing their stocks by rebranding with cryptocurrency jargon (December 21, 2017)
https://qz.com/1163073/beverage-companies-are-juicing-their-stocks-by-rebranding-with-cryptocurrency-jargon/

EXPONENTIAL ISN'T QUITE RIGHT - The nutty math that really shows how quickly bitcoin has grown (December 17, 2017)
https://qz.com/1158913/how-quickly-is-the-value-of-bitcoin-growing/

What Is Bitcoin Really Worth? Don’t Even Ask. (DEC. 15, 2017)
https://www.nytimes.com/2017/12/15/business/bitcoin-investing.html

SIGNIFICANT VOLATILITY - Coinbase is investigating claims of bitcoin cash insider trading (December 20, 2017)
https://qz.com/1161391/bitcoin-cash-bch-price-spike-leads-to-coinbase-insider-trading-probe/

Bitcoin's Real Value Could Be Zero, Morgan Stanley Analyst Says (December 26, 2017)
https://fortune.com/2017/12/26/bitcoin-price-value-bubble-crash-says-morgan-stanley-analyst/

How To Buy Bitcoin - Advice From Your Trusted Financial Adviser (December 25, 2017)
https://fortune.com/2017/12/25/how-to-buy-bitcoin-humor/