Something out of Left Field
BostonCoin news pup*date Nov-Dec 2019
Something Out of Left Field
A month is a long time in cryptopia, and a lot can change. Last month we reported that the Chinese government had welcomed crypto and blockchain with open arms, and bitcoin rocketed up around 40% in a single day. A few more ticks of the clock, and other news out of China sees bitcoin plumbing new lows. Bitcoin going from AU$11k to AU$14k over the last weekend of October was a lovely ride, and it took many altcoins with it. It was a ride which very few people saw in advance (unless the chartists were privy to the thoughts of the Chinese president).
When bitcoin dropped back down to AU$10k, and many altcoins followed, it was a rude shock. Despite the tendency for bitcoin to head south every single Christmas season, every single year since it was born, investors and traders were again taken by surprise. It seemed that China may have been the elephant in the swimming pool which ejected many of the smaller swimmers. How much sway do a billion people put on the crypto market? It turns out that whilst one or two large whales can sometimes manipulate a market, a billion people will really change the tides. As the Chinese government have flip-flopped literally thousands of times on cryptocurrency regulation (over 2200 times and counting, in a single decade), one would think that diehard investors would be immune to their vacillations. Aside from China pushing and pulling the market on a whim, tradition still dictates a likely bitcoin dive in December and rebirth at Easter (the opposite of the Jesus mythos). As it turns out, the market does not seem to have a backup memory chip installed. Too many forget the lessons of the past and try to swim against the whales, at the whim of market forces which they cannot predict and cannot control.
Where do elephants come from?
We are using the analogy of elephants with purpose. Many crypto traders speak of “whales”: investors who hold vast amounts of cryptocurrency, sometimes millions or hundreds of millions of dollars’ worth, and when the crypto whales buy or sell, the “smaller fish” feel the impact of the move. Like their namesakes, whale investors can be found almost anywhere in the world, however, elephants are famous in only a couple of regions: Asia and Africa. Coincidentally, these two regions are also epicentres of massive human population, and under-utilised banking, two perfect conditions for the adoption of cryptocurrency. Whilst the broad market is monitoring China, wiser and more insightful investors are looking toward Africa, for a market impact which will seem “totally out of left field” for those who have not been paying attention.
A tsunami of wealth for early adopters