BITCOIN AND CRYPTO CURRENCIES
Many people all over the world have indicated a strong interest in crypto currencies, such as bitcoin, and how they may profit from their invention and their rapid onset into the financial lexicon.
Most of the sentiments that have created a sense of excitement are also the ones that manifest the inherent infirmity of these instruments as a viable financial source of profitable trading. THAT MAY NOT ALWAYS BE THE CASE. However, in present form, they are inherently unreliable and will seldom be recommended by The Futures Wizard.
Let’s look at some key factors that render these instruments typically, although not always, outside of the realm of commonly predicted markets:
In theory, many of their features sound like the Holy Grail of all investments.
Here is the non-touted reality:
The upshot of this narrative mandates government involvement. This involvement is precisely what would be required for crypto currencies, like bitcoin, to have real intrinsic value. This inescapable fact is inapposite to the purported purpose of their creation.
In the first instance, bitcoin, and all other known crypto currencies, are not truly limited in their supply. While there may only be a limited number of bitcoin that may ever be created, that number is infinitely divisible. The result is a sentiment, or touting, that conveniently fails to account for the ultimate power of quantum physics.
In reality, there is no limit to the number of bitcoin units that may be created which renders the limited supply sentiment utterly misleading from an economic as well as a mathematical standpoint.
From a trading standpoint the results are extremely poor. In fact, misleading statements are consistently made regarding the profitability of investing in Bitcoin or other crypto-currencies. For certain the price has risen considerably since their inception. YET THE OVERWHELMING INVESTORS THAT BOUGHT THESE INSTRUMENTS (THOSE THAT INVESTED ON AN INCREASE IN VALUE) LOST MONEY!!
How can that be? To put it simply there is no one that bought Bitcoin at its initial offering and held the product until it reached its highest level. These statements completely mislead the unsuspecting reader into believing that they would have made a killing if they had only bought Bitcoin when the price was low… WRONG! The markets do not move straight up or down and it takes incredible skill to control trading assets as the markets make inevitable and significant price swings. Over 90% of those that went long (bought) Bitcoin or other Cryptocurrencies were taken out of the market at a loss. THINK ABOUT THAT FOR A MOMENT…
90% of investors who were on the right side of the market still lost money!
THE FUTURES WIZARD MAKES A VERY BOLD STATEMENT HERE…
FOLLOW OR FAIL!
TAXATION and INSTABILITY
Moreover, when you own bitcoin outright you will be taxed simply if the value increases! That simply does not happen with any other currency. Imagine, for example that the US Dollar increases in value and all “holders” of the dollar are indiscriminately taxed due to this increase? The implementation and aftermath of such a premise is infeasible on its face. Yet this is the reality for those who are holders of bitcoin and other crypto currencies. For obvious reasons this makes them much less stable and hence less desirable.
Furthermore, nothing is to prevent more versions of crypto currency from being created. The economic reality of this dynamic will not only create competition amongst them but will also serve to make their supply limitless. Diametric to the original touting of limited supply, the true forces of supply and demand work against the attractiveness of owning these instruments from an economic and financial perspective.
There is also clearly less security in crypto currencies, including bitcoin, as regulation is, sometimes, a good thing. The desired economic anarchy of these products makes them less stable and much more susceptible to manipulation. This, in turn, makes them less efficient.
At the present time, and certainly for the foreseeable future, an increase in the purchasing power of the Dollar is not a taxable event. To the contrary, bitcoin ownership does trigger a taxable event. Hence, the holder of crypto currency also has an added underlying commodity risk.
For example, when you sell an asset using US Dollars you are only taxed on the stated value, not the intrinsic or market value, of the dollar. You could purchase an asset for $100.00 when the value of the dollar index was 70.00. If you sell that same asset 2 years later for $150.00 (when the value of the index is 120.00) you are only taxed on the 50 dollar capital gain (in this case at the long term rate of 15%). In reality (or in real dollars) you have received far more than 50$ on the return of the sale.
As stated at the onset, the end result of our narrative mandates government involvement. This is precisely what would be required for bitcoin to have real intrinsic value and is a notion that is, again, precisely inapposite to the purpose for the creation of bitcoin in the first place. Indeed, the creation of products such as “stablecoin” was to assuage this glaring decrepitude in crypto currency.
The reason for their frailties stems from fundamental applied economics. In the example above, since the time you purchased the sold product, each dollar received is now worth almost 2 times what it was worth when the original purchase was made. Without going into too much economic theory that is beyond the scope of our purpose, it should be noted that inflation occurs when the dollar is worth less (i.e. a hypothetical illustration would be when the average loaf of bread costs $100).
All markets are mired in, what we at “TFW” call, semantical warfare. The bitcoin/crypto currency market has taken this concept to an entirely new level.
Proponents are quick to tout that the price of bitcoin is equivalent to its value. What they fail to conceptualize is what the definition of “value” is. We have little doubt that if the ardent supporters of bitcoin, or any crypto currency at the present time, were asked the question; Does hot air rise? Their answer would be…“of course it does that is a scientific fact” or something to that effect.
But that answer misses a point for which the proponents of bitcoin and crypto currencies have turned a blind eye. Hot air will not rise if the air above it is hotter! Smoke and mirrors are what is driving these markets at this early stage of their inception.
On top of that, tight restrictions have been placed not only by the exchanges that allow for bitcoin trading (something demand practically forced to happen) but by the further restrictions that have been placed by brokerage firms executing such transactions.
This reality makes them doubly difficult to effectively take advantage of. Indeed, many brokerage firms typically increase the margin requirements for bitcoin trading far above the limits set by the exchanges.
Moreover, any financial instruments that are subject to the restrictions of an exchange are also inherently subject to some form of control. This is diametric to the manner in which this product has been marketed.
When the contradictions become too great, it is also far past the time to be extremely skeptical of the worthiness of any of the enticing claims made by the proponent of any product. Such is the case here. The mere fact that they are taxed takes the esoteric flair out of crypto currency and reduces it to a practical nullity.
THE PARADOX OF CRYPTO CURRENCIES
The paradox discussed above also creates potential. Anytime emotions are involved we can profit from them (and hence why The Futures Wizard may on occasion make a prediction in these markets). But make no mistake, the intrinsic value is virtually worthless at least in theory and ultimately in reality as well.
In fact, there are already rumors about units of one millionth of a bitcoin. That means that 21 trillion bitcoin units already exist! Again, the supply enticement is nonsensical and egregiously misleading.
At TFW “Perception is Reality.” What we offer, and what differentiates us from virtually any other service, is that we provide our members with a tangible predictive service. WE PUBLISH WHAT WILL HAPPEN BEFORE IT HAPPENS. Unlike any other service, the added value to you is something you can perceive and witness and is based on proven observable results. NO OTHER COMPANY DOES THAT- PERIOD! We provide unparalleled predictions on some of the world’s most important and largest markets and regardless of what market that may entail profitability is the ultimate goal of every investor.
A REITERATION OF THE CONCEPTS EXPLAINED ABOVE
There are the inherent infirmities of even the strongest of proponent’s views: There is nothing to prevent other limitless crypto currencies (“bitcoins”) from being created and thus the potential endless supply renders them inherently worthless in an intrinsic sense. Crypto currencies, like bitcoin, are not pegged to any financial benchmark.
The statement of common belief, that the supply is limited, is also inherently flawed. One reason, as aforementioned, relates to quantum physics applied to finance. There are only 21 million purported bitcoins in existence correct?
This is nonsense as any number is divisible by infinity! Meaning they could say that only one crypto currency was created… how many times can the number one be divided? Importantly, the division of these crypto currencies is precisely how they have been structured to proliferate!
TFW warns all traders to be leery of fanciful products that may contain some economic flair or uniqueness attached to them. Efficiency is the ultimate criterion for sustained profitability.
Regardless of the market that may be contained in our communications we urge you to simply apply our clear predictive disseminations and you will instantly have the ability to trade like a wizard. At the Futures Wizard, you will see predictive capabilities that are unparalleled and are based, as our trademark implies, on the Future!
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