The Cryptocurrency Industry Is 'On the Brink of an Implosion', Research Says

An important harbinger of trouble to come is that the Tether (USDT) coin, which is supposed to be pegged 1:1 to USD, is now trading substantially below $1:<p><a href="https:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2018-10-15&#x2F;dollar-peg-that-underpins-20-of-crypto-trades-is-under-pressure" rel="nofollow">https:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2018-10-15&#x2F;dollar-pe...</a><p>Billions of Tethers were printed seemingly out of thin air and used to purchase Bitcoin. It&#x27;s part of the foundation of the house of cards that keeps Bitcoin at its current price:<p><i>&quot;Despite their modest total market value of about $2.4 billion, Tether’s coins play an outsized role on cryptocurrency exchanges. They were the second-most traded among all digital currencies after Bitcoin as of Oct. 15, according to data compiled by CoinMarketCap.com.&quot;</i> <a href="https:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2018-10-14&#x2F;why-crypto-traders-are-so-worried-about-tether-quicktake-q-a" rel="nofollow">https:&#x2F;&#x2F;www.bloomberg.com&#x2F;news&#x2F;articles&#x2F;2018-10-14&#x2F;why-crypt...</a>

In general, if you pick the all time high as a starting point for your &quot;research&quot; it&#x27;s all the way down from there. Bitcoin&#x27;s daily transaction volume is moving to second layer so the metric used is not very useful.<p>More importantly, and I can&#x27;t stress this enough, the FX value of a cryptocurrency is not directly related to the project&#x27;s status (developer activity or security track record, etc) but it is correlated to public perception of its value, which is why these sort of article pops up every now and again at regular intervals.<p><a href="https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;Bitcoin&#x2F;comments&#x2F;9niw8x&#x2F;lightning_network_at_the_senate_counterargument&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;Bitcoin&#x2F;comments&#x2F;9niw8x&#x2F;lightning_n...</a>

I doubt it. There is nothing to implode. Most of the activity in the &quot;industry&quot; is shuffling around tokens between the various blockchains as their respective cheerleaders hype their chosen coin and spread FUD about competing ones. All of the &quot;real&quot; economic activity surrounding cryptocurrencies (e.g. darknet commerce) will continue regardless of the price since darknet prices are pegged against the value of government currency anyway. The cryptocurrency world will continue to churn with activity indefinitely because creating the appearance of activity <i>is</i> what the industry does

Bloomberg absolutely loves writing these &quot;Anything not a central bank is on the brink of implosion&quot; scare articles. They must generate a tons of views.<p>Unfortunately Bloomberg as a whole doesn&#x27;t know anything about cryptocurrency beyond the speculation side which is similar to their existing competencies. But that&#x27;s all they see.<p>We have a blind man feeling an elephant&#x27;s ass and telling us it&#x27;s shitty. While true, it only describes a tiny part of what cryptocurrencies are or do.

Thanks Bloomberg for this advertorial summary of a 1250$ research .pdf. Saves me some money to invest (in crypto or otherwise).<p>Would you believe that the author of this research was harping about blockchain adoption by large companies less than a year ago? A lot has changed in 11 months, such as a slow price drop from the 2017 December insanity.<p>Isn&#x27;t it a bit rich to first make companies anxious to join in on the bandwagon, then to turn around and say they are investing into something that is on the very brink of destruction? Based on pretending that Bitcoin was invented at its height in December 2017?<p>Heck, I did not sell any of my market research, I gave it away for free (silly me). Sure, sure, I made a few million here and there, but nothing like charging 0.5 BTC to tell you the financial world is collapsing, because John McAffee is so irrationally bullish.<p>This time it is real though. I can feel it too. Bitcoin is over! I hope you made out like a bandit, because soon, the only way to make money is to sell research about the impending bounce-back of crypto.<p>Of course the early adopters of Bitcoin are critical about its demise. They have a vested financial interest in seeing it succeed. Unlike these researchers, who only stumbled upon Bitcoin when they realized that people are willing to pay for their objective expert opinion on something they themselves missed the boat on.

Bitcoin and similars are the biggest waste of computing power and energy in the history of the planet. It will be nice for the environment when this is all over.

Those red lines on the graph are just awful: arbitrarily drawn to make things look worse. Fit an actual model and drawn on prediction intervals next time.<p>I have never owned crypto currency, I&#x27;m just easily triggered by bad graphs.

I&#x27;m uninformed and bearish on bitcoins, but I find it helpful to look at the historic bitcoin price on a log scale.<p><a href="https:&#x2F;&#x2F;bitcoincharts.com&#x2F;charts&#x2F;bitstampUSD#tgSzm1g10zm2g25zl" rel="nofollow">https:&#x2F;&#x2F;bitcoincharts.com&#x2F;charts&#x2F;bitstampUSD#tgSzm1g10zm2g25...</a><p>Bitcoin has had <i>relative</i> declines this big and lasting this long (late 2013 to mid 2015) only to bounce back later.

Wasn’t there a HackerNews post last week about Bloomberg journalists getting paid for articles that move markets? This one seems like one of those articles.

I feel like its another case of the tech bubble. The projects with real causes and uses will come back from any implosion in the long run.

According to the finance industry and finance media, the cryptocurrency industry, and cryptocurrencies in particular, have been on the brink of collapse since 2008, when Bitcoin first surfaced and was worth $0.<p>I guess they&#x27;re going all-in on the whole &#x27;stopped-clock&#x27; prediction strategy, no?

Another one for the Bitcoin Obituaries <a href="https:&#x2F;&#x2F;99bitcoins.com&#x2F;bitcoinobituaries" rel="nofollow">https:&#x2F;&#x2F;99bitcoins.com&#x2F;bitcoinobituaries</a><p>Honestly I have no idea whats going to happen. I threw some money into Bitcoin I was okay with loosing and check on it every few months. It&#x27;s been fun.<p>Maybe some perfect storm of the Lightning Network, Web Payments and dodgy banks or failing economies will bring about some crypto-utopia. Or maybe it will implode and in the end all we have done is collectively purchased a metric shit ton of GPU&#x27;s.<p>Actually, that&#x27;s not <i>all</i> we would have done. It didn&#x27;t work out but at least we ran the experiment.

It&#x27;s interesting that an article like this pops up now. From a technical analysis perspective the entire crypto market had been exhibiting classical accumulation properties for two months now.<p>Before critics show up - technical analysis is not meant to predict the future, but rather to pick the more probable outcome.

Unless there&#x27;s more analysis than what&#x27;s quoted in the article, this appears to be nothing more than trend analysis based on the last few months.

Here is Bitfenix&#x27;s cold wallet address:<p><a href="https:&#x2F;&#x2F;bitinfocharts.com&#x2F;bitcoin&#x2F;address&#x2F;3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r" rel="nofollow">https:&#x2F;&#x2F;bitinfocharts.com&#x2F;bitcoin&#x2F;address&#x2F;3D2oetdNuZUqQHPJmc...</a><p>They have about 934 Million in BTC, having had as little as 869 Million USD recently. Their tether liabilities are between 2.5 and 3 Billion USD:<p><a href="https:&#x2F;&#x2F;coinmarketcap.com&#x2F;currencies&#x2F;tether&#x2F;" rel="nofollow">https:&#x2F;&#x2F;coinmarketcap.com&#x2F;currencies&#x2F;tether&#x2F;</a><p>It has long been asked how a token can be pegged to 1 USD without any actual USD.<p>The reality is that it can work if your balance in other currencies doesn&#x27;t go below the average price you bought them at. The more the price of btc goes down, the more btc they have to give back when people exchange their tethers for btc (you can&#x27;t exchange them for USD).<p>Two dynamics work in their favor:<p>First, exchanging tethers for btc means buying btc, which makes the price of btc go up. If people buy the btc so that they can exchange it at real exchanges for USD, then this effect would be temporary and you would see a disconnect between the price of btc at Bitfinex and real exchanges like coinbase. Two days ago the premium on Bitfinex was about $100, now it is about $400 higher than coinbase and bitstamp.<p>Second, what many think originally happened due to the stark correlation between tether creation and btc price jumps on bitfinex, was that the creation of tethers and subsequent transfer in bulk to bitfinex&#x27;s exchange caused the btc price to rise. Now not only do they benefit from creating tethers out of nothing, they get the exchange commission on top AND get to create the illusion of demand. This illusion of demand was seen to work extremely well on unsophisticated investors during the run up to 20,000 USD per btc, helping to create articles, fear of missing out and general hysteria that brought in more unsophisticated investors buying in to something they did not understand.

Well, hopefully graphics card prices will drop then.

I have a new BS rule when its a crypto currency headline just replace with Pharm Industry..you get the same exact meaning

Instead of inventing bitcoin because evil banks maybe people should do some consumer rights stuff? I have become painfully aware that using an ATM in America costs money... Whose idea was that anyway. Why is Mastercard making billions? A percentage based fee instead of a flat fee. As if it matters if you use your CC to buy a carton of milk or a car.<p>Hocus pocus Capitol Hillus make usury illegal spell. I really don&#x27;t want to use cash anymore.

Getting my popcorn ready...<p>This is the silliest human endeavor that somehow seems to attract a few smart people too.

Is there even any reason the world needs more than 1 cryptocurrency? I know there are dozens (hundreds?), but they all effectively do the same thing, right? Allow decentralized currency that can be used for legal and illegal transactions.

Two anti-crypto stories on the same day?<p>&quot;Blockchain isn&#x27;t about democracy and decentralisation – it&#x27;s about greed &quot;<p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=18219256" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=18219256</a><p>I&#x27;m not a fan of cryptos, but it&#x27;s fascinating how so much of the media ( even in different countries ) push the same narrative in almost a coordinated fashion.

&gt;Echoing sentiments of mainstream economists<p>Yea, Paul Krugman has been saying &quot;Bitcoin is doomed&quot; since 2012. He&#x27;ll always be wrong because this is all politically motivated. The banking and political establishment are scared shitless by alternative currencies, crypto or otherwise. Google the &quot;Liberty Dollar&quot;. Mouth pieces for the financial industry like Bloomberg will attack alternatives to the petrodollar no matter what they really think, and obviously they know Bitcoin has a future because Goldman-Sachs has bought tons of them.