After losing $ 532B in value, is Cryptocurrency a screaming purchase?

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Bitcoin: the online currency used to buy Alpaca wool socks and illegal drugs whose value fell from $ 17.50 a "penny" after a June 19, 2011 & nbsp; to hack in its currency exchanger, Mt.Gox –& nbsp; received much media attention, I wrote seven years ago.

If I had bought, say $ 10,000, of & nbsp; bitcoin then, & nbsp; say 10 cents apiece, it would be $ 678 million as of June 11th.

In case you were attracted to the bitcoin world in December 2017, when it hit $ 19,500 per person, the logic would suggest to feel pain now that drops 65% to $ 6,782.42.

A larger basket of cryptocurrencies is down 64% from their peak at the beginning of January. Second Bloomberg, digital assets tracked by Coinmarketcap.com were valued June 11 at $ 298 billion – at the start of January 2018, their value was $ 830 billion.

The last bitcoin dip trigger was the freezing of Coinrail, the 99th largest trade with a 24-hour volume of $ 2.66 million. The Exchange based in South Korea, & nbsp; "On 10 June, a system check was made due to the hacking attempt at dawn, and at present, 70% of your total tokens / tokens reserves have been confirmed to be stored securely and transferred to a cold and preserved wallet ".

This raises a big question: how do people make decisions? I like the theory proposed by Daniel Kahneman, who won the Nobel Prize in 2002 for his work on behavioral economics. Kahneman claims that people have two systems to decide & nbsp; System 1, with their instinctive reactions, & nbsp; and System 2, which methodically weigh costs and benefits.

From that theory his work investigates a series of heuristics – my favorite is the confirmation bias (the idea that people embrace information that reinforce their strongly rooted beliefs and reject information that undermine their convictions).

The mystery for me is the way in which these unshakable beliefs are created in the first place. For this, I am influenced by the theory that people's beliefs are created by leaders of groups – such as family members, friends or people with strongly held opinions – to which a person belongs. If such a leader can tell an emotional story from an emotional point of view, which respected peers embrace, then that belief can be spread to everyone in the group.

What moves the bitcoin price? It's a mystery to me.

Actions are difficult to assess, but at least in the United States and other countries there are fairly stringent standards for reporting the financial conditions of publicly traded companies. These standards allow investors to apply a valuation theory – they are worth today's dollar value of their current cash flow – to equities.

There is no such theory or proof of the ability of bitcoins to generate cash flows. But c & # 39; it was & nbsp; no & nbsp; lack of opinion on why bitcoin prices were rising last December. Ninety-six percent of the economists interviewed by the Wall Street newspaper at the beginning of December 2017 it was believed that the bitcoin price hike was driven for speculation on the future potential of blockchain technology, which – despite the periodic theft – is touted as a safe transfer of values ​​on the Internet.

But there are other points of view on what moves the price – namely the belief strongly convinced that Bitcoin and a handful of other cryptocurrencies will conquer the world because they and the so-called Blockchain, the anonymous, public ledger of transactions that support it, it is far superior to any other method of conducting transactions.

In January, I had conversations with a student who was convinced of it. The answers in italics of the student below revealed what seems to me a confirmation error:

• "Does it bother you that bitcoin is used to sell illegal drugs or to finance terrorism?" No – those things do not happen because of the bitcoin.
• "Are you worried about the risk that the place where you store your bitcoins could be hacked and you could not get it back?" No – the risk is very small.
• "Are you worried that bitcoins can lose much of their value in a very short period of time?" No – when this happens it is a purchase opportunity.

Back in June 2011, the cause of the fall in bitcoin prices was the failure of the Japanese bitcoin exchange. And in January 2018, a nearly $ 500 million theft by Coincheck, the Japanese exchange, triggered another sale Bloomberg.

The collapse of Coinrail, much smaller than South Korea, seems to have triggered the fear of contagion. As Stephen Innes, head of the Asia Pacific who trades in Singapore with Oanda, told Bloomberg, "This is" If it can happen to A, it can happen to B and it can happen to C, "then people panics because someone is selling ".

Naeem Aslam, at the ThinkMarkets online trading platform and a Forbes contributor, he said al guardian:

The question is: is there any limit to these hacks? After every few months, we are witnessing the development of the same model. This is the result of regulatory control and regulators must intervene to protect consumers. Anyone who wants to do anything with exchanges should be forced to adopt high-level security and regular security updates. Is bitcoin a purchase after the panic of the sale?

For & nbsp; the bulls bitcoin & nbsp; to be & nbsp; right, cryptocurrency must be accepted by governments, banks and traders. But governments are not exactly embracing the crypt with open arms – indeed, the SEC has been repress the so-called Initial Coin Offerings.

And US regulators are investigating potential price manipulation in four major cryptocurrency exchanges, as reported by & nbsp; a June 8 & nbsp;Wall Street newspaper report, which arrives six months after the CME Group launched bitcoin futures. Regulators ask for & nbsp; Coinbase, Bitstamp, itBit and Kraken to share trading data related to futures contracts.

In the meantime & nbsp; China is "blocking its trading platforms," ​​according to Bloomberg.

Is it only a matter of growing pains due to the inevitable absorption of the world by cryptocurrencies? If you think so, the last dive is a purchase opportunity.

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Bitcoin – the online currency used to buy Alpaca wool socks and illegal drugs whose value has dropped from $ 17.50 to "pennies" after a hacker of June 19, 2011 in its currency exchanger, Mt.Gox – has received much attention from the media, I wrote seven years ago.

If I had bought, say $ 10,000, bitcoin then, say 10 cents apiece, it would be worth 678 million from June 11th.

In case you were attracted to the bitcoin world in December 2017, when it touched $ 19,500 each, the logic would suggest you experience pain now that drops 65% to $ 6,782.42.

A larger basket of cryptocurrencies is down 64% from their peak at the beginning of January. Second Bloomberg, digital assets tracked by Coinmarketcap.com were valued June 11 at $ 298 billion – at the start of January 2018, their value was $ 830 billion.

The last bitcoin dip trigger was the freezing of Coinrail, the 99th largest trade with a 24-hour volume of $ 2.66 million. The South Korean-based exchange said: "A system check was made on June 10th due to the hacking attempt at dawn.Today, 70% of your total tokens / tokens are been confirmed to be stored securely and transferred to a cold and conserved wallet ".

This raises a big question: how do people make decisions? I like the theory proposed by Daniel Kahneman, who won the Nobel Prize in 2002 for his work on behavioral economics. Kahneman argues that people have two systems to decide: System 1, with their instinctive reactions and System 2, which methodically weigh costs and benefits.

From that theory his work investigates a series of heuristics – my favorite is the confirmation bias (the idea that people welcome information that reinforces their strongly rooted beliefs and reject information that weakens their beliefs).

The mystery for me is the way in which these unshakable beliefs are created in the first place. For this, I am influenced by the theory that people's beliefs are created by leaders of groups – such as family members, friends or people with strongly held opinions – to which a person belongs. If such a leader can tell an emotionally compelling story, which respected peers embrace, then that belief can be spread to everyone in the group.

What moves the bitcoin price? It's a mystery to me.

Actions are difficult to assess, but at least in the United States and other countries there are fairly stringent standards for reporting the financial conditions of publicly traded companies. These standards allow investors to apply a valuation theory – they are worth today's dollar value of their current cash flow – to equities.

There is no such theory or proof of the ability of bitcoins to generate cash flows. But there was no shortage of opinions as to why bitcoin prices were rising last December. Ninety-six percent of the economists interviewed by the Wall Street newspaper at the beginning of December 2017, it was believed that the hike in bitcoin prices was driven by speculation on the future potential of blockchain technology, which – despite the theft theft – is touted as a safe transfer of values ​​via the internet.

But there are other points of view on what moves the price – namely the belief strongly convinced that Bitcoin and a handful of other cryptocurrencies will conquer the world because they and the so-called Blockchain, the anonymous, public ledger of transactions that support it, it is far superior to any other method of conducting transactions.

In January, I had conversations with a student who was convinced of it. The answers in italics of the student below revealed what seems to me a confirmation error:

• "Does it bother you that bitcoin is used to sell illegal drugs or to finance terrorism?" No – those things do not happen because of the bitcoin.
• "Are you worried about the risk that the place where you store your bitcoin could be hacked and you would not have the chance to get it back?" No – the risk is very small.
• "Are you upset that bitcoins can lose much of their value in a very short period of time?" No – when this happens it is a purchase opportunity.

Back in June 2011, the cause of the fall in bitcoin prices was the failure of the Japanese bitcoin exchange. And in January 2018, a nearly $ 500 million theft by Coincheck, the Japanese exchange, triggered another sale Bloomberg.

The much smaller Coinrail collapse in South Korea seems to have triggered the fear of contagion. As Stephen Innes, head of the Asia Pacific division at the Singapore Netherlands, told Bloomberg: "This is" If it can happen to A, it can happen to B and it can happen to C & # 39; people panic because someone is selling ".

Naeem Aslam, at the ThinkMarkets online trading platform and a Forbes contributor, he said al guardian:

The question is: is there any limit to these hacks? After every few months, we are witnessing the development of the same model. This is the result of regulatory control and regulators must intervene to protect consumers. Anyone who wants to do anything with exchanges should be forced to adopt high-level security and regular security updates. Is bitcoin a purchase after the panic of the sale?

Because bitcoin bulls are right, cryptocurrency must be accepted by governments, banks and traders. But governments are not exactly embracing the crypto with open arms – on the contrary, the SEC has begun to suppress the so-called Initial Coin Offerings.

And US regulators are investigating potential price manipulation in four major cryptocurrency exchanges, according to June 8 Wall Street newspaper report, which arrives six months after the CME Group launched bitcoin futures. The regulators ask Coinbase, Bitstamp, itBit and Kraken to share trading data related to futures contracts.

Meanwhile, China is "blocking its trading platforms," ​​according to Bloomberg.

Is it only a matter of growing pains due to the inevitable absorption of the world by cryptocurrencies? If you think so, the last dive is a purchase opportunity.