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3 Major Catalysts for Cryptocurrencies in the Future

Since the highs in December 2017, Bitcoin and most cryptocurrencies have seen a sharp decline, and agile traders/investors have mostly exited to await better buying opportunities.

This includes myself, and after cashing out my profits in early 2018 (after the double top reversal), I have started to accumulate small amounts of Bitcoin for my long-term portfolio when prices are low.

Despite the volatility, I am still optimistic for the long-term potential of Blockchain and Cryptocurrencies, hence it is important to know which catalysts will likely move prices in the future.

1. Increased Regulation

At first glance, this might seem like a bad thing, as many countries around the world (China, Australia, Taiwan, Philippines, US, etc) start to clamp down on Crypto-related activities, or impose some kind of restrictions and controls. And prices reacted to such news of regulation negatively as expected, with a prolonged downtrend lasting several months.

However, what most people don’t realise is that such regulation is actually a good thing in the long run, and necessary for Cryptocurrencies to become more “mainstream” and widely adopted. Which means that while we can expected prices to fall, it is also a good catalyst to enable us to buy these assets at lower prices in the future. Timing is key.

2. Institutional Funds

Once their is sufficient regulation and prices are low enough, institutional investors (hedge funds, asset managers, etc) are likely to come into the market. This is where the big moves are going to come from, as we saw from the dotcom boom. And recently, we have heard some news/rumours that big names like George Soros, Rothschild, Rockefeller, etc are starting to come into the market.

If we look at the graph below, we can see that a major trend is usually driven by institutional investors, which means that despite the meteoric rise of Cryptocurrencies over the past few months, it is still nowhere near a bubble, since the “real big money” from institutional investors have not started to pour in yet.

Imagine a future where fund managers and pension funds all include Cryptocurrencies as one of the asset classes in their portfolios, together with stocks, bonds, gold, etc. This will definitely create a huge demand for it, and push up prices faster than we have ever seen.

3. Scale & adoption

One major debate is whether Bitcoin (and other cryptocurrencies) can serve its purpose as a global currency with a stable store of value, and cheap & fast transactions. Currently, it is not there yet, and how fast it can get there will depend on how well the product can be improved. The volatility will naturally decrease over time as the market cap increases, but the speed and cost of transactions will depend on innovations and improvements from developers.

0 Comments/by Spencer Li

Cryptocurrencies & The 50-Year Kondratiev Wave Cycle

Market Analysis

“In economics, Kondratiev waves (also called supercycles, great surges, long waves, K-waves or the long economic cycle) are hypothesized cycle-like phenomena in the modern world economy. It is stated that the period of a wave ranges from forty to sixty years, the cycles consist of alternating intervals between high sectoral growth and intervals of relatively slow growth.^{” – Wikipedia}

After the global financial crisis in 2008, the market bottomed in 2009, and since then we saw the start of a new major cycle, which could last till 2050/60. This means that we are still in the early stages (fast growth stage) of a big long-term trend. This trend consists of not just cryptocurrencies, but also things like blockchain, AI, VR/AR, machine learning, etc.

Will it Crash Like the Dot Com Bubble?

In every phase of innovation, it will start off with radical innovation, where a new technology is introduced. This will be a period of experimentation and flux, as many new products come into the market. Cryptocurrencies are currently in this stage, which is why prices are so volatile.

As you might be aware, there are 3 main types of coins: currency, platform, and applications. Some people also include a 4th type called privacy coins, like Monero and Zcash, which are meant to allow completely anonymous transactions. Some examples of currency coins include Bitcoin, Litecoin & Bitcoin Cash, and their main purpose is to serve as a virtual currency. However, Bitcoin behaves more like an asset rather than a currency now, since people are buying it for capital appreciation rather than to use it for transactions. Platform coins refer to ones like Ethereum, which do not directly provide a function to the consumer, but allow applications to be built on their platform. Lastly, applications are like the iphone apps, which serves a particular function for the end user.

After the market has gone on long enough to enter the bubble stage, the next phase of innovation is the “shake out” phase, where the market gets rid of “useless” or bloated/weak products. This will typically be the part associated with a market crash, but it is also possible that the bubble deflates slowly instead of bursting.

In an early stage boom, the application coins will tend to proliferate, and there will be a lot of them. This means that this class of coins would be the most risky to invest in, because a lot of them will be the first to die out when the market crashes.

After the dust settles, the ones who survive will likely become the dominant players (Facebook, apple, Amazon), and it is worth noting that the best products/technology may not necessarily be the ones that survive, rather it is the one with the widest adoption. Do keep this in mind when building your Crypto portfolio and deciding which coins to invest and hold for the long-term.

After the crash, the trend may take a while to resume, but it will be more majestic than before. The next phase involves incremental innovations, where products are further refined, such as improvements in the products, or new applications for existing products, etc.

So Should I Buy Now?

Although we know we are at the early stages of a mega-trend, we also have to keep in mind the “shake out” phase which has not occurred yet.

If you are willing to hold through that and capture the subsequent big upside, then you will not need to worry so much about timing the market now. But if you prefer to take a more cautious approach, you can wait till the “shake out” is over before entering the market.

And lastly, if you prefer the best of both worlds, you can use swing trading to capture the short/medium-term moves in the market, while waiting for the “shake out”, and then going all-in when the dust settles. Whichever approach you choose, just make sure you don’t miss out on this 50-year wave, because it is literally once in a lifetime. 😀

2 Comments/by Spencer Li

Crypto Mastery Program (CMP) – The Dawn of a New Age!

News & Events

Last weekend, we conducted out first run of the “Crypto Mastery Program”, and it was a full-house turnout for our first batch of crypto enthusiasts!

Based on the feedback we got, this is the first and only fully comprehensive course on Cryptocurrencies in Singapore, which covers:

Fundamentals of Blockchain technology, cryptocurrencies, bitcoins, Alt coins, etc
Value investing strategies to find undervalued coins for long-term investment
Technical analysis & short-term trading strategies to capture smaller price movements, and to time the entry for long-term investments
ICOs (initial coin offerings) and how to profit from them while avoiding the scams
How to mine for coins with zero technical knowledge (includes free tour to mining farm)
How to create a diversified portfolio of crypto assets to ride this next big wave of wealth creation

This course is taught by 2 trainers:

Spencer Li – Self-made millionaire professional trader with 10+ years of experience, and specialises in technicals & price action
Ong Jun Hao – Crypto trader who made 100x returns in less than a year, and specialises in fundamentals & news analysis

Registration is open for 2018: https://wp.me/P1riws-78a

Training Feedback from Attendees:

“Attended CMP on 2-3 Dec 2017. Great course with very resourceful contents, covered wide range of topic from Background, ICOs, Mining, Investing, Trading and Portfolio Allocations. Comprehensive explanation from both Spencer and Jun Hao on fundamental valuation and technical trading perspective. The course contents are suitable both beginners and advanced traders who are looking to step into Cryptocurrency.” – ZT

“Great programme! Really learned alot about cryptocurrencies. As a beginner, it really felt like I took a knowledge express train. Jun Hao & Spencer are also very willing to share their knowledge!” – Aw Jian Yang

“A useful start to those who want to learn more about cryptocurrency investment instead of jumping in blindly.” – Susan Tan

“SL & JH are well verse in their domain. For newbie/noob, it is 2 days well spent to get started in Crypto World.” – Gary Koh

“Great course! Provides a good foundation to understanding & trading cryptocurrencies!” – Ed

“Very informative, easy pace for beginners.” – Al

“Opened my eyes to a whole new dimension on cryptocurrencies. Jun Hao is very knowlegeable on cryptocurrency.” – Eugene

“Jun Hao and Spencer are very good teachers, very clear in their explanation, very knowledgeable and professional. They selflessly share their knowledge with students. The course is very good and must attend for anyone interested in cryptocurrency investing and trading.” – Adrian

“Great program for those who are interested to know crypto and want to profit from it. The program content is very useful for both beginner and advanced traders. Definitely must attend couse.” – Kwaw Zaw Than

“A good framework for people who intends to dive into the crypto world, be it investing or trading. The course covers fundamental, technical, behavioral and news analysis, which makes it comprehensive. Thank you Spencer and Jun Hao for the wonderful sharing.” – Darrell Su

“This course is very informative. The instructors are very knowledgeable and open to share their trading experience and tips.” – CW Tay

“Highly recommended to those who wants to know what is crypto/invetsment/mining.” – YC

“I would recommend this program to friends who are keen in trading/investing into cryptocurrencies.” – Goh Lily

“Attended the first cryptocurrency course and it was extremely informative for a complete newcomer such as myself. The theory behind it was in-depth, coupled with practical examples which helped consolidate what we learnt. Turns out cryptocurrency isn’t as complex as is looks and sounds. Both spencer and jun hao were forthcoming, constantly highlighting the pitfalls of dabbling in cryptocurrencies. Great introductory lesson for those just starting out. What i liked was also how the tools could be employed across all financial instruments will also benefit me as an equity investor.” – Wei Keong

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Register Early to Avoid Disappointment!

All of slots are closed for 2017, but we have opened new slots for 2018, so those who are keen can start registering now to avoid disappointment, as our last course was sold out within a week after we opened the registration.
Registration link: https://wp.me/P1riws-78a

Good luck to all future “Crypto Millionaires”, and see you all at the top! 😀