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Topic: Crypto and it's effect on silver (Read 1506 times) previous topic - next topic

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Crypto and it's effect on silver
Social Media has an enormous effect with the millennials, this group are now young professionals now.
This is one of the primary drivers in the crypto market.
I spent years on Yahoo finance, paying great attention to the psychology, until they ruined it with the changes that led me to create this forum. Which i believe was intentional, because "they" knew the power of free speech in social media and did not want one for there bull market in stocks.
Things really different in the crypto market than any other market i have ever seen.  I watched the dot com bubble as my boss at the time was a day trader. I got into silver and miners soon after and was an regular user of their message boards for 15 years.
Bitcoin is not the crypto market, it's like the AOL of crypto. too slow and expensive, and pretty soon it will be too old to update to compete with the newest tech. EOS for example.  The group I am referring to knows a lot about the variations of this technology and most do not just buy bitcoin, some like me, don't buy BTC at all except to use to trade. this is one of the primary functions of BTC and creates great demand for that coin, as inter exchange use does not require the blockchain to transfer.  Point being, BTC being potentially over bought/valued does not mean that the crypto market is totally dependent on BTC's price fate.
So what i see happening is social media is causing a flood of people who are gaining an interest in crypto world wide.  And it is facilitating the transfer of information about the other choices.  What makes this different is that the flood of money in is going to a whole new group of people. When i trade NEM, that is held by hedge funds, huge trading houses, people that had money when they bought it, index funds.  Places where money already was. The majority of crypto holders were not rich before this. They are now. What is happening now is there is a brand new group of investors that have no background in investing, there are few to no ways to get someone else to manage for them. So what they do is they just keep throwing money at it. most do not trade much but buy and hold, when there is selling, the majority do not take their money off the exchange or out of crypto, they put it right back in.
Why is all this relevant you say?
It is because of where the money that is leaving the exchanges is re-invested, i don't mean Lambos or Miami condos either. These "kids" are looking to turn their virtual profits into real wealth. the thing is is that this group understands fiat. What it is, how it is less real than a bitcoin and do not want to have that as a safe way to hold this newly gained money.  Most do not have stock accounts or want one. Being a more open minded type they also know to look for the next big thing without knowing or caring about past price performance.
Silver fits everything they want, actually physical possession of something real. Potential for the very long term future.  Crypto has taught them find something you like and hold on to it until you have very large gains. Social media a perfect conduit for the silver story and i see it being passed around like bitcoin was years ago. 
I also am seeing a lot of former gold and silver traders moving to crypto, we all know what they will do with all that money that is being made. 
Silver is a very tiny market and could be controlled by a very small group,  one such group almost had it in the 2000's when the silver bugs started stacking as a whole. The overflow from crypto will have an impact on phys demand, and it won't take much to break the consolidation off the 2015 bottom and when that breaks, it will start the cycle of higher paper prices, which in turn causes increased demand. Silver has a strong presence in the crypto market already and the move on that break will be like pouring gas on a fire due to the strong tie between social media and crypto.
  • Last Edit: January 17, 2018, 07:11:25 PM by edthelorax
For Entertainment Purposes Only.

  • ken
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  • Global Moderator
Re: Crypto and it's effect on silver
Reply #1
Great analyses. Thank you for that.

  • Erich
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Re: Crypto and it's effect on silver
Reply #2
BTC the AOL of the crypto market? Maybe yes maybe no but at this point in time it is the clear leader among the 1200 other "coins"
 I believe if and when the Lightening network gets off the ground the slow transaction speed and the high costs will disappear.
The question remains if and when. BTC was the best trade of the year for me this year by far. I no longer hold any BTC or GBTC but
 I do have a small amount of a block chain related company SSC, as a spec play. Crypto is here to stay, but the dominant players or yet to be created dominant player is up for debate.
GLTA ER
PS the BITCOIN trust GBTC is doing a 90 to 1 split which should attract a lot of new buyers that cant afford the $1400 share price.

  • Nikko
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Re: Crypto and it's effect on silver
Reply #3
Ed, I think you overestimate millenials. This is a generation that has had everything GIVEN to them. They cannot fathom something going against them ( like Trump winning ) snowflakes.
Bitcoin and all these alt currencies will all go to zero eventually...they are worthless as backed by nothing. Anyone can create one...and when govmts create them ( backed by taxes and armies ) they will all be illegal and worthless.
Remember what I said...Gold will be worth more than bitcoin with 18 months...who did I have that bet with?

  • Erich
  • [*][*][*][*]
Re: Crypto and it's effect on silver
Reply #4
Ed, I think you overestimate millenials. This is a generation that has had everything GIVEN to them. They cannot fathom something going against them ( like Trump winning ) snowflakes.
Bitcoin and all these alt currencies will all go to zero eventually...they are worthless as backed by nothing. Anyone can create one...and when govmts create them ( backed by taxes and armies ) they will all be illegal and worthless.
Remember what I said...Gold will be worth more than bitcoin with 18 months...who did I have that bet with?
That would be me and I will be willing to up the bet to two beers if you would like!

  • ken
  • [*][*][*][*][*]
  • Global Moderator
Re: Crypto and it's effect on silver
Reply #5
Ed, I think you overestimate millenials. This is a generation that has had everything GIVEN to them. They cannot fathom something going against them ( like Trump winning ) snowflakes.
Bitcoin and all these alt currencies will all go to zero eventually...they are worthless as backed by nothing. Anyone can create one...and when govmts create them ( backed by taxes and armies ) they will all be illegal and worthless.
Remember what I said...Gold will be worth more than bitcoin with 18 months...who did I have that bet with?
That would be me and I will be willing to up the bet to two beers if you would like!
Not cheap beer I hope!

  • Nikko
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Re: Crypto and it's effect on silver
Reply #6
Done Eric!
No cheap beer...we are gentlemen who enjoy the finer things in life!

Re: Crypto and it's effect on silver
Reply #7
Ed, I think you overestimate millenials. This is a generation that has had everything GIVEN to them. They cannot fathom something going against them ( like Trump winning ) snowflakes.
Bitcoin and all these alt currencies will all go to zero eventually...they are worthless as backed by nothing. Anyone can create one...and when govmts create them ( backed by taxes and armies ) they will all be illegal and worthless.
Remember what I said...Gold will be worth more than bitcoin with 18 months...who did I have that bet with?
Goldman Sacs with over 1.4 trillion $ under their management and complete control of the US govt. financial system is opening a crypto trading desk. TMy belief is thy are not doing that to be involved in a dying asset. The fed govt. has indirectly endorsed bitcoin by allowing COBT CME futures contracts.
Yes there is always the risk of bans, but until they do, the potential gains trading these coins is astronomical.
Since i put 20% of my portfolio in crypto, I have pulled that initial investment back out 7 times over and still have much more than my initial in, even after last weeks crash.  I only put what i was willing to lose in, and that was not that much.  JMBullion accepts bitcoin as payment for real, physical silver. I was able to buy more silver last month than i was able to  2011-17 combined.  I am going to continue to reallocate my profits into physical, real wealth.
What gives crypto it's value is it's utility.  I can send 10000$ half way around the world for .17$ in less than an hour with Litecoin. 
IBM has partnered with Stellar Lumens (STR/XLM).  Ripple (XRP)  has a group of 16 Japanese banks working together to make international bank transfers with their technology.  JMBullion accepts BTC as payment for gold. You will see other major online retailers start accepting crypto as payment. There are companies such as bitpay that facilitate these transactions, taking any risk out of the hands of those accepting payment.  From my personal experience, (donations to this site) crypto has been used 6 to 1 over paypal.  A great big THANK YOU to those who were able to contribute to  keeping this site ad and fee free.
As far as the millennials, go the ones i am referring to  are far from having everything handed to them, one i know works for a major commodities trading house in London, another is a dentist, a CAD draftsman, one works for an oil co. in Texas. Yes there are a few who are not employed as they quit their jobs when they had more in the crypto market than they could ever make in a lifetime working for someone else.  But these are not slackers, living off mommy and daddy by any stretch of the imagination. The majority of the money going into crypto is brand new money, not the old money (stocks and bonds).  For now the trend is when crypto crashes, they throw more money at it, they don't panic sell and pull their money out.
I am not trying to make a bullish case for crypto at this time, just pointing out what i see and i do not see any change in the attitude from last month. Maybe they need to be taught a lesson,  like i was in 2008.  I think crypto now is similar to silver in 08, where i learned my lesson right before the last push higher.
I have a bitcoin chart with lower BTC targets, a good trader could make a large fortune shorting bitcoin, you can get leveraged accounts up to 200x i believe. I do not need leverage, and i sure am not a good enough trader to short bitcoin.
But if you are, here is a chart.  The arrows show the strength of the 100DMA.  As you can see the first target was hit, just wrong on the time. Those are real downside targets, the red being the old 2014 high, or the future price of bitcoin after world-wide banning.
my short term upside target is 15k. During this time, many alts will make new ATH's bringing many to the targets when the alt is charted against BTC.
For those who don't know, you can type in an alt and a currency pair on  tradingview. like ALTUSD or ALTGBP or ALTBTC.

For Entertainment Purposes Only.

  • Azzz
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Re: Crypto and it's effect on silver
Reply #8
Great post and valid points Ed. Millennials thrive on instant gratification, quick fixes and razor fast results. When those aren't met they are easily emotionally driven which i believe is the result of the crypto price action. It's everything every other market was at an accelerated pace because as you mentioned, social media platforms.  While many will point to bitcoin as a bubble, it has already demonstrated the importance of a public distributed ledger use case (i.e. AOL demonstrated usefulness of the internet). Ethereum proved the strong demand for smart contracts and to make crypto more than just as currencies and transfer of wealth (i.e. internet development tools: java, flash, etc.) Now the next set is generation 3.0-4.0 crypto: possibly Eos,iota and other variants which needs to take both distributed public ledgers and smart contracts to a usable level with high transaction capability and no fees. (i.e. windows, OSx, linux high speed operating systems to make it easy and accessible to the users).

BTC and ETH goals were to be decentralized but the fallacy is they are controlled by ~10 and 2 mining pools respectively. High fees is what gets them paid but new cryptos are already seeing the bigger picture that you cannot go mainstream unless it's free to the end user. What if it cost fees to make posts and reply on Silverstocker forum?

I believe 90% of crypto is held by 2%~ of the population so it isn't in bubble territory yet but the technology is here to stay and change is needed for mass adoption. Much like the dotcom burst, Google and Amazon were born and thrived on one thing -> fast, accessible and free to use. Public ledger, smart contracts, inter channel payment systems and decentralized communication indicate this is the direction of the future.  That said, everything else you've mentioned is still a battle on two fronts, big money vs new money flooding in. There will still be manipulation but there's too much money to be made. If millienials have no patience for stocks or forex, crypto will stick around for a while. Just my two cents :)

  • Nikko
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Re: Crypto and it's effect on silver
Reply #9
Ed, I am super happy you made money in them...but it does not change my mind that they are all worthless in the end. One must understand that they are only worth what people are willing to pay for them ( greater fool theory )
Blockchain technology is valuable for sure, but not bitcoin and its peers.

Re: Crypto and it's effect on silver
Reply #10
As always, i greatly appreciate and value your opinion.  Nikko
For Entertainment Purposes Only.

Re: Crypto and it's effect on silver
Reply #11
I am going to try to tie this back to silver.
This is a very rare instance in silver, known for it's volatility. Only 2003 comes  close to comparing how the moving averages have converged and flattened.  these are the 50 100 and 200 WMA's very long timeframes,

Gold was similar a month ago, but has broken above since.

XRP has a reputation for an association with Japanese banks. I go to watch the price action as i held for the last 8 months.  What happened is at the end of the consolidation, it went sideways, literally boring people out of the coin.  Crypto move much faster than everything so this is only a 1d chart.

Now i am not saying this is going to happen this week or next to silver, but something similar will happen, and it will be fairly soon.
For Entertainment Purposes Only.

Re: Crypto and it's effect on silver
Reply #12

For Entertainment Purposes Only.

  • sn00p
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Re: Crypto and it's effect on silver
Reply #13
i see people calling doom end of world long silver long gold... I agree long silver long gold... but not because of doom in spx500 or dow30 or even the nas100... I see btc futures being the big spike provider.. btc is slow and expensive... as people buy it and realize how bad it is they move into alts like ed has shown... the real spike driver will be now that the USGOVT and GS are trading these assets.... a 'crypto trading desk' doesnt mean exclusivly BTC... they know that this one is inferior! Ed showed XRP a centralized coin that is much much faster than BTC and has much lower tx fees... EOS is another that is a game changer in speed and utility.... The bet (as seen in this pastebin from WSJ https://pastebin.com/4weBggiZ ) is that the banks and the big money movers are AGAINST BTC... They know the real money the 'futuristic tech' is not what is in our (the minnow) hands but theirs (the whales & sharks).

  • sn00p
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Re: Crypto and it's effect on silver
Reply #14
to bring it back to focus... I guess I'm trying to say that all those ppl who are long the btc futures contracts from the top are scared right now... they see doom on the horizon potentially... They want out and into something else.... metals? oil? NGAS? something else and fast if it keeps going down as it is ~ 50% off its ATH already

Another reason could be as people realize their btc is worthless and they cannot cover their margin positions on alts with BTC.... they may rapidly realize this and try to buy phys with it? As ed mentioned some people accept btc and crypto for phys.