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Hodor

Current Crypto Investment Trend

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I was going to title this thread "Its Not a Bubble!", but I thought the reference to Arnold Schwarzenegger's famous line from Kindergarten Cop might be lost on some readers...
 
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I kind of feel like Arnold did when people keep saying "we're in a bubble."   My reaction is astonishment.  If anything, it's a "bubbling trend" at best, but its definitely not a singular bubble.  Singular bubbles burst, and then they go back to the previous state.  There are many different parabolic valuations happening with individual ICOs (Initial Coin Offerings), and in the crypto-currency space in general.  It's a massive influx of capital that is starting to look like a permanent shift in where people are storing value.  I don't think there is a "bubble", because I don't foresee these people going "back" to traditional finance anytime soon.  

Capital Flight
(source: http://www.investopedia.com/terms/c/capitalflight.asp )

Quote

The term “capital flight” encompasses a number of situations. It can refer to an exodus of capital either from one nation, from an entire region or from a group of countries with similar fundamentals. It can be triggered by a country-specific event, or by a macroeconomic development that causes a large-scale shift in investor preferences. It can also be short-lived or carry on for decades. Illegal capital flight generally takes place in nations that have strict capital and currency controls. For example, India’s capital flight amounted to billions of dollars in the 1970s and 1980s due to stringent currency controls. Liberalizing the economy from the 1990s onward reversed this capital flight as foreign capital flooded into the resurgent economy. Capital flight can also occur in smaller nations beset by political turmoil or economic problems. Argentina, for instance, has endured capital flight for years due to a high inflation rate and a sliding domestic currency.

So that's the official & traditional definition of capital flight.  

But to see how it applies in 2017, it's not just about geographic flight.  It's about the money itself.  Bitcoin made it possible to create a store of value that is fiat-independent and extremely resistant to government control.  Anybody worldwide can own XRP, for example.  And we know that, long-term, XRP is only going in one direction with regards to value.  So why would investors continue to pour money into markets which are now being measured at greater and greater value against fiat, when they're smart enough to understand that inflation is occurring regardless of the official information that's being communicated?  The smart ones are getting out of the traditional markets first.  They've done the math and seen others get very wealthy with parabolic returns on Poloniex.  Yes, it's possible for them as well - it's possible for any of us.  

Who's Money Is It?

It's difficult to get large amounts of money directly into the crypto-currency space.  As most of you have discovered, you must first deal with a transfer to ... Bitcoin, usually ... and then transfer those to an exchange where you can purchase any other type of crypto-currency.  This is not a system where large amounts go unnoticed.  If you're a whale trader and you want to be sneaky about things, it's very difficult due to the fact that the first steps into the system are very easily tracked by exchanges.  

Even given these issues, the "big money" is starting to take notice, and investment bankers and venture capitalists are starting to place their bets as well.  The big risk-takers got in back in 2014, but the other more mainstream investment bankers are now on notice about the potential returns.  And... it's a good bet that their customers want in on some of these headline-making returns.   (source: https://moneymorning.com/2014/04/11/check-out-whos-investing-in-bitcoin-now/)

One reporter tried to grasp the magnitude of the capital flight taking place, flowing into bitcoin and other crypto-currencies.  (source: https://news.bitcoin.com/bitcoin-experience-flow-new-money-mainstream-attention/

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These days there is significant interest in crypto-currencies stemming from Asia and not just from China anymore. India, Japan, and South Korea are starting to become dominant players within bitcoin trading markets. There definitely seems to be a whole lot of money moving towards crypto-currencies like never before as the entire market capitalization commands a whopping $83 billion.

Notice the mention of South Korea?  That's the country where, to trade any Bitcoin or crypto, one of the KYC procedures is a face-to-face interview.  What's driving South Korean's to overcome even these incredible barriers to entry and pay an exorbitant mark-up on Bitcoin?  Political Unrest, and increasing tensions with North Korea!   (source: http://thebitcoinexaminer.com/bitcoin-price-hits-3800-in-south-korea-factors-of-arbitrage-cryptocoinsnews/ ) These sorts of anecdotal observations lead me to believe that it's the common "small potatoes" investor that's putting their fiat into
crypto-currency.  

Are We Done?
83 billion might seem like a lot of international value.  It's not.  Its literally a blip on the radar screen of international value.  Some individual companies have market capitalization larger than all of the money in crypto-currency.  (source: https://en.wikipedia.org/wiki/List_of_public_corporations_by_market_capitalization )

We are at the beginning, not the end!

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We've "gone parabolic" twice now.  It will happen multiple times again.  If you're a trader, place your bets, but remember where your "smart money" should be when it comes to the long-term investment that will integrate with the current banking infrastructure of the world.  

Make sure your "stash" is safely stored in XRP! 

 

Edited by Hodor

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13 minutes ago, Hodor said:

a permanent shift in where people are storing value

in dogecoin or potcoin?!

c'mon man, 99% of these coins are utterly useless, pump and dump schemes

the public is getting duped, it's the beginnings of a bubble

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11 minutes ago, zerpdigger said:

in dogecoin or potcoin?!

c'mon man, 99% of these coins are utterly useless, pump and dump schemes

the public is getting duped, it's the beginnings of a bubble

I think it's less a bubble than the majority of crypto holders live in a bubble... Real world usage (and therefore real value) is being far outpaced by the speculation fueled price swings. Its 98% hype at this point in time.

To date as far as I know XRP has being used to purchase a sandwich and a jacket. That's it. Banks are using ILP and might be interested in XRP soonTM,, the other interested parties are gateways and exchanges whose sole business is to trade/ sell crypto for 'real money' or fiat, and speculators (investors is a lose term that I reserve for those that actually see a real world profit).

Now that being said I believe in XRP, I wouldn't be here otherwise, but I am actually enjoying (kinda) not holding much of any crypto. It lets me sit back and watch the show without getting too caught up in all the hype, fuss and stress. I see immense potential, but to say it's being realized right now would be a stretch of the imagination. When the average Joe on the street knows what crypto is and can get their hands on some easily, or I see those 'built on ripple' logos everywhere then I will know it has succeeded.

Ripple's journey has just began, and its use and therefore real world impact is climbing and will continue to do so - perhaps to even match the lofty price predictions everyone likes quoting. It is risky to realize those price prediction now though- it is the definition of speculation and at some point the majority of traders will realize that.

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9 minutes ago, zerpdigger said:

the public is getting duped

Oh, I agree with you completely on this particular point, @zerpdigger !

The ICOs are doing a phenomenal job of sucking investment away from the legitimate choices like XRP. 

Just look at the case of pets.com from the internet bubble pulling investment dollars away from choices like Google? (source: http://money.cnn.com/galleries/2010/technology/1003/gallery.dot_com_busts/ Hard to believe in retrospect, but that's what we're seeing now with XRP - we all know it's the logical choice, but the market is irrational at present....

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9 minutes ago, Mercury said:

Ripple's journey has just began, and its use and therefore real world impact is climbing and will continue to do so - perhaps to even match the lofty price predictions everyone likes quoting.

:yes3:

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actually i am hoping ILP and XRP will actually help to burst the bubble wide open, once there's a level playing field for crypto-assets

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Well I feel there absolutely is a bubble. The vast majority of coins have no real business model, business plan, road map or anything. They are simply instruments that have gathered people around cheering. The message of most coins is "we have a blockchain. buy my tokens." And people buy.

Prices go up from the dummest of reasons. "Litecoin activates segwit soon!" So what, I can now shuffle my colored socks faster than ever. Is my sock shuffling business now more valuable? "Bitcoin will be accepted in more and more stores in Japan!" So what, my restaurant doubled the number of tables but we still have one chef. Am I generating double profits now?

It makes me question my own investment in xrp when I feel that 80% of the money in crypto should not be there.

 

 

 

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4 minutes ago, Kerppi said:

Well I feel there absolutely is a bubble. The vast majority of coins have no real business model, business plan, road map or anything. They are simply instruments that have gathered people around cheering. The message of most coins is "we have a blockchain. buy my tokens." And people buy.

Prices go up from the dummest of reasons. "Litecoin activates segwit soon!" So what, I can now shuffle my colored socks faster than ever. Is my sock shuffling business now more valuable? "Bitcoin will be accepted in more and more stores in Japan!" So what, my restaurant doubled the number of tables but we still have one chef. Am I generating double profits now?

It makes me question my own investment in xrp when I feel that 80% of the money in crypto should not be there.

Most crypto 'investments' are nothing more than a day at the races and with as much 'research' put into. You can have as much funny diagrams, averages and 'facts/ tips' as you like, but the chances are the odds are not in your favour.

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10 minutes ago, Kerppi said:

The vast majority of coins have no real business model, business plan, road map or anything. They are simply instruments that have gathered people around cheering. The message of most coins is "we have a blockchain. buy my tokens." And people buy.

When the internet bubble happened around 2000 and then subsequently burst, it didn't burst for all of the companies.  The ones with no real business model took a significant hit, but the ones with solid use cases and the backing of industry and customers withstood the test, and remained strong. 

This is the critical difference between these alt coin ICOs and XRP.   XRP is the real deal.  It is the "Google" or "Apple" of the crypto-currency space. 

If I'm wrong, and there is a bubble within crypto, we will be the best positioned based on history....  (source: http://time.com/3741681/2000-dotcom-stock-bust/ ) And if I'm not wrong, and we're at the start of investment, we will be more than well-positioned.  XRP will eventually be at the #1 ranking.  It's not a matter of "if", but only "when" at this point! 

Edited by Hodor

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4 minutes ago, Mercury said:

Most crypto 'investments' are nothing more than a day at the races

Long term this is not the case.  If you can spot the crypto-currency that will win early on, you will eventually win at levels that are cataclysmic.  True story:

http://www.minyanville.com/special-features/articles/excite-google-microsoft-yahoo-apple-bankruptcy/4/23/2010/id/27013

Quote


In 1999, Larry Page and Sergey Brin, the founders of Google (GOOG), decided that their creation was interfering with their studies and offered it to a slew of companies (including the defunct Alta Vista, which passed, and Yahoo (YHOO), which also passed, but had a strong enough product that they were able to stay afloat with their own technology). An offer was then made to Excite's George Bell, who deemed the asking price of $1 million too high. Vinod Khosla of Kleiner Perkins went back for another attempt -- this time for $750,000 -- and was thrown out of Bell's office.

Google's own creators undervalued their investment factors too high to measure.  Now think about Ripple.  XRP.   RCL.   Payment Channels.  ILP. 

I know the truth.  And my investment's not going anywhere!  XRP will moon, but the only question is how long it will take the market to "recognize"!  :d_sunny:

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10 minutes ago, Hodor said:

If I'm wrong, and there is a bubble within crypto, we will be the best positioned based on history

I guess we see this differently. I think xrp valuation is not  in a bubble but the market as a whole is in a bubble. That doesn't mean I would not consider xrp a good investment. Unfortunately when market bubble bursts, all participants tend to take a hit even though their price wouldn't consist of air. :)

 

Edited by Kerppi
typo

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1 minute ago, Kerppi said:

the market as a whole is in a bubble

I don't agree, but completely see why others believe this. 

I think we are seeing a worldwide trend of capital flight, and this is happening before any worldwide financial downturn, or second "Greek crisis".  If anything like that happens, 89 billion will seem like a distant memory.  I'd predict 250+ billion at that point flowing into the space.  Even though I'm not a believer, I see BTC hitting 10k before it reverses.  I see XRP hitting 20+ USD next year by this time (This is purely based on my own speculative "gut" feeling - I DO NOT have any inside information). 

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13 minutes ago, Hodor said:

Long term this is not the case.  If you can spot the crypto-currency that will win early on, you will eventually win at levels that are cataclysmic.  True story:

http://www.minyanville.com/special-features/articles/excite-google-microsoft-yahoo-apple-bankruptcy/4/23/2010/id/27013

Google's own creators undervalued their investment factors too high to measure.  Now think about Ripple.  XRP.   RCL.   Payment Channels.  ILP. 

I know the truth.  And my investment's not going anywhere!  XRP will moon, but the only question is how long it will take the market to "recognize"!  :d_sunny:

To be fair- I did say *MOST* crypto's :D

Some of the offerings are not only long shot horse bets, but the damn horse is laid up with a broken leg, in another stable, out of the country, past its prime, not even used for stud... and still receiving bets. The odds of a winner are astronomical.

Anyone remember the scenes from the movie the Big Short where Selena Gomez explains how a synthetic CDO works? Most coins today are synthetic solutions to none existent issues (or ill defined issues, or just no stated issues at all...). At best it's a casino dressed up as a investment opportunity, its a risky trading floor accessible to the masses rather then a few testosterone laden traders.

For better or worse some of these same people play with XRP, and XRP competes against these other coins. Remember when @miguel expressed shock/ frustration that a awesome team backed Ripple is still receiving less vetted funding than some ICO coins? That's what we are up against. Of course there is a bubble, a roof raised by no walls or foundation will collapse at some point. The question is if XRP will be dragged down and/if it will rebound

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