The secret language of Wall Street revealed

Say these five words out loud very quickly: Bifurcation, Backwardation, ZIRP, NIRP, Contango.

Did you do that?

If so, did you sound like a cheerleader singing a foreign language?

These are actual words used by many Wall Street traders, gurus and promoters.

They may sound funny or confusing, but they serve several purposes. (1) They reveal or describe certain market conditions. (2) They act as “signals” for trading purposes. (3) They are intended to confuse and/or impress you.
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And those are just a few of the many words, acronyms and sayings that make up the “Secret Language” of Wall Street.

The funny thing is, most people (myself included) aren’t impressed by words that don’t make sense.

However, if you have a basic understanding of them, you will be better equipped as an investor and more likely to stay ahead of the crowd. Think of it as learning how to “connect the dots” of a financial puzzle.
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Compare this to trying to run a business in a foreign language (German, French, Japanese, Greek, etc.). If you don’t understand the language, you will most likely lose money… A LOT of money.

So, like learning any language, you need a good teacher or translator who makes it simple and easy to understand.

That’s where we come in.

In this article, we will introduce a few words so that you can see how easy it is to learn the language and, at the same time, understand how Wall Street makes things so confusing.

Let’s start with ZIRP. It is an acronym that means “Zero Interest Rate Policy”.

It was launched after the 2008 crash to “supposedly” stimulate the economy. It is true that ZIRP has caused critical damage to most nations’ pension plans. (They need interest rates high to fund their plans for their retirees.) ZIRP has also crippled most senior citizens who depend on interest from their investments for a living.

Although rates are slowly rising, it will take a long time to undo the damage done by ZIRP.

But let’s move on to NIRP. It’s another acronym that stands for “Negative Interest Rate Policy.” Yes, you read that right. NEGATIVE interest policy.

It is more collateral damage from the crash of 2008 and is in effect mainly in European countries.

Here’s the crazy part. When a country’s government bonds have negative interest rates (currently -0.05% to -0.36% or more), investors must PAY THEM to keep their money.

It’s a losing proposition for an investor and it’s hard to imagine anyone buying bonds with negative rates, but millions have been sold.

We’ve only scratched the surface here, but hopefully you can see how confusing and misleading these acronyms are.


An analysis of the expansion of learning volume

I have been trading using a method called VSA or Volume Spread Analysis which I learned from Tom Williams, a former syndicate trader, who lives in Europe. His main theology is based on 3 principles.
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1. Monitoring and understanding the volume that shows the real activity of professionals, which is most important because professionals drive the market, not retailers.

2. Following the spread, which is the high/low of each bar that appears, this alerts the trader to a bullish or bearish trend in a particular price movement.
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3. After closing price, or price action that tells you how price reacts to volume and spread.

Using these 3 techniques you can successfully trade on the right side of the market, with professionals. When you learn to understand these principles, you will find that your decisions to enter a trade are rationalized by what you actually see, not by a false indicator.
Tom Williams improved on the studies of Wycoff, another great trader, to create a conventional software program that can be used for trading, called the trade-guider. Which last about 3K. However, I don’t suggest wasting your money on this b/c you can take the principles you’ve learned and trade successfully without going out of pocket.
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I trade any pair based on what I gather from the daily charts, and I look at the spreads and volume when you enter a trade, it’s based on the fact that I either see a bar with no demand that closed on weak volume or no professional support for the move. Or a downward move that has no professional support. As a way to better understand VSA, you can access the volume and gas pedal to the car and your spread is the actual movement, the graph represents the hill your car has to climb. You may have extremely high volume but your range is low, which basically means that the gas is stepped on a lot, but the actual movement of your car is not far off.
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5 facts about Forex trading

In terms of market size, without any doubt, the Forex market is the largest market in the world. It boasts an average turnover of over $4 trillion per day. Over time, this large but decentralized marketplace has become extremely popular. First of all, this happened due to numerous innovations in the world of technology in the last few decades. Today, with the help of technology, millions of traders can enter the foreign exchange market. If you are new to this market, below are 5 facts that can give you a deeper insight into this business world.
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1. Small wins add up

Although Forex is one of the best markets in the world, most traders do not make huge profits in the beginning. At first, they analyze the market and make a few trades with small amounts of money, earning small profits. As time goes by, small gains add up. This type of trader has a lot of experience in trading.
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In fact, your goal should be to use the right strategy to keep making money without losing much.

2. Choosing a reputable broker is important

For ROI, the Forex market offers endless possibilities. But it is really important that you sign a contract with a good reputable broker. By good we mean a broker that is regulated and licensed. Proper research is required to ensure that you hire a broker who is professional and established. They should offer different types of services including good customer support.
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3. Emotions are not important

By nature, trading is an emotional endeavor because your hard-earned money is at stake in a market that is volatile and unpredictable. But if you enter the market with an emotional mindset, you are more likely to suffer failure. In fact, when you are emotional, you tend to make hasty decisions.
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If you don’t want this to happen, you may want to build a trading strategy based on a trial trading account, known as a demo account. In fact, learning to trade objectively is only possible if you put your emotions aside when trading. This will increase your chances of making regular returns on your investment.
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4. Insider trading is a false belief

Contrary to what most people may have told you, there is no truth to insider trading in the Forex market. So, it is important to keep in mind that you will have to make your decisions based on current market conditions and the latest news. In other words, there is no magic way or shortcut to making a profit.
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5. A simple strategy works better

Ultimately, if you are looking for a solid approach to succeed in this trading world, you should use a simple strategy instead of a complicated one. In other words, you should opt for a simple but tested strategy based on deep market analysis. You can apply this strategy throughout your trading career.
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How "Crypto" Currencies Work – Brief Overview Bitcoin, Ethereum & Ripple

“Crypto” – or “cryptocurrencies” – is a type of software system that provides users with transactional functionality over the Internet. The most important feature of the system is theirs decentralized nature – usually provides blockchain database system.
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Blockchain and “cryptocurrencies” have recently become staples of the global zeitgeist; typically as a result of the “price” of bitcoin skyrocketing. This prompted millions of people to participate in the market, with many “Bitcoin exchanges” undergoing massive infrastructure stresses as demand increased.
The most important thing to understand about “crypto” is that while it actually serves a purpose (cross-border online transactions), it does not provide any other financial benefit. In other words, its “intrinsic value” is strictly limited to its ability to transact with other people; NOT in storing / propagating value (which is what most people see).
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The most important thing to understand is that “Bitcoin” and the like are payment networks – NOT “currency”. This will be covered in more depth in a second; The most important thing to understand is that “getting rich” with BTC is not a case of giving people a better economic position – it is simply a process of being able to buy “coins” at a low price and sell them at a higher price.

To that end, when looking at “crypto” you must first understand how it actually works and where its “value” actually lies…

Decentralized payment networks…

As mentioned, the key thing to remember about “Crypto” is that it is predominantly a decentralized payment network. Imagine Visa/Mastercard without a central processing system.

This is important because it highlights the real reason why people have really started to look deeper into the “Bitcoin” proposition; gives you the ability to send/receive money from anyone around the world, as long as they have your Bitcoin wallet address.

The reason this assigns a “price” to various “coins” is the misconception that “Bitcoin” will somehow give you the ability to make money by virtue of being a “crypto” asset. It’s not.

The ONLY The way people have made money with Bitcoin is as a result of its price being “raised” – buying “coins” at a low price and selling them at a MUCH higher price. While it has worked well for many, it is actually based on the “bigger fool theory” – basically it says that if you manage to “sell” coins, it is to a “bigger fool” than you.

This means that if you want to get involved in the “crypto” space today, you’re basically looking at buying any of the “coins” (even “alt” coins) that are cheap (or cheap) and using them as the price goes up until later sold out. Since none of the “coins” are backed by real-world assets, there’s no way to gauge when/if/how this will work.

Future growth

For all intents and purposes, “Bitcoin” is spent power.

The epic rally in December 2017 indicated mass adoption, and while its price will likely continue to climb into the $20,000+ range, buying one of the coins today will basically be a big gamble that this will happen.

The smart money is already looking at most of the “alt” coins (Ethereum/Ripple etc) that have a relatively small price tag but are steadily growing in price and adoption. A key thing to look at in the modern “crypto” space is how the various “platform” systems are actually used.

Such is the fast-paced “technological” space; Ethereum & Ripple are looking like the next “Bitcoin” – with a focus on how they are able to give users the ability to actually use “decentralized applications” (DApps) on top of their underlying networks to get the functionality to work.

This means that if you are looking at the next level of “crypto” growth, it will almost certainly come from the various platforms that you can identify out there.

Latest Cloud Computing Trends to Watch in 2020

In the current corporate industry, the use of cloud computing has become an unspoken norm. Almost everyone has heard of it, and its advantages are far-reaching and wide – it saves costs, increases efficiency, helps to do work faster, etc. In various market research conducted over time, the results have shown that this trend of using cloud computing in companies and technology houses will increase in the coming years.

So far, there have been some significant changes that have occurred in the field of cloud computing, and it will be important for companies to look at them when investing their time and capital in cloud computing.

quantum computing-

Quantum computing literally translates as tasks that once took hours will now take exponentially less time, seconds to be exact. This means that computers and servers will now process information much faster than usual, increasing the speed of networking in the future. It should be remembered that today’s networks have cloud computing at their core, which means that significant technological changes will occur in cloud computing due to the development of quantum computing.

Use of Blockchain

Blockchain technology has led to the development of faster network systems. Many businesses, especially financial technology powerhouses, have increased their use of blockchain in their cryptocurrency analysis and validation. At the center of all this is cloud computing, which has the potential to host crypto-commerce, including Initial Coin Offerings.

Increasing digital literacy-

As the newer workforce enters the workforce over time, we are finding that they are much more knowledgeable about the technological advancements of newer technologies, especially cloud computing. Thus, companies will see that they have two types of workers – technologically advanced and those who are not so technologically advanced. Companies will need to implement various training and induction programs to keep older generations digitally aware.

worker mobility-

Drawing correlations with the increasing digital knowledge among workers, the trend is soon catching up with newer workers, and this concerns the mobility of workers and their work. With cloud computing, workers do not need to be present in their offices and premises every time they work. They can work from anywhere, on any device, and get the job done. Any company that does not offer them mobility will not have loyal employees.

Edge Computing-

Edge computing means ‘bringing computing closer to the data source’. Because of this, the communication between the network and the data source is significantly minimized, increasing the computation speed and significantly reducing the costs. How does that happen? With computing. This kind of technology is used in modern devices such as smart refrigerators, smart speakers, cars, etc., and is only possible thanks to cloud computing.

AI (Artificial Intelligence): A New Revolutionary Invention-

Artificial intelligence is considered to be the future of digital automation. The automation possibilities it offers companies have surprised even the most optimistic people, and even with its criticism, people are beginning to realize how useful AI can be. With AI, we are expected to see the rise of devices using edge computing, which means that its basis lies only in cloud computing. Artificial intelligence is something every business should be on the lookout for.

Serverless Computing-

This is a newly developed model of cloud computing where a dynamic backend system helps you scale up and down depending on the usage of your application or service instead of using predetermined servers. This technology is also considered futuristic and is supported by people like Microsoft CEO Satya Nadella. Open source serverless computing service providers will slowly emerge, reducing the need for server vendors that you have to lock into their services.

Data Center Ecosystem-

By combining the power of machine learning, cloud computing and data processing with quantum computing, we will soon see software become a service rather than a subscription-based commodity that will be easily consumed by companies and businesses with the help of these newly developed technologies. In this way, the project completion time will be reduced, costs will be reduced and we will see a reduction in redundant processes. It would appear that the way data is viewed today would be revolutionized, with cloud computing technology at its core.

In conclusion, the current progress in cloud computing is only a glimpse of what is to come. It’s just a base. At the forefront of it all would be the many new innovations and technologies that will be there to revolutionize the way we do everything we do.

If you thought you missed out on the Internet profit revolution, try cryptocurrency

When most people think of cryptocurrency, they might as well think of crypto currency. Very few people seem to know what it is and for some reason everyone seems to talk about it as if they do. Hopefully, this report will demystify all aspects of cryptocurrency so that by the time you’re done reading, you’ll have a pretty good idea of ​​what it is and what it’s all about.

You may or may not find that cryptocurrency is for you, but at least you’ll be able to speak with a degree of certainty and knowledge that others won’t possess.

There are many people who have already reached millionaire status by dealing with cryptocurrencies. Clearly there is a lot of money to be made in this brand new industry.

Cryptocurrency is electronic currency, short and simple. However, what is not so short and simple is how it has value.

Cryptocurrency is a digitized, virtual, decentralized currency produced using cryptography, which, according to the Merriam Webster dictionary, is “the computerized encoding and decoding of information.” Cryptography is the foundation that enables debit cards, computer banking and eCommerce systems.

Banks do not support cryptocurrency; it is not supported by the government, but by an extremely complicated algorithmic arrangement. Cryptocurrency is electricity that is encoded into complex sequences of algorithms. What gives the money value is their intricacy and security from hackers. The way cryptocurrency is made is simply too difficult to reproduce.

Cryptocurrency is in direct contrast to what is called fiat money. Fiat money is a currency that gets its value based on a government decision or law. The dollar, yen and euro are all examples. Any currency that is defined as legal tender is fiat money.

Unlike fiat money, another part of what makes cryptocurrency valuable is that, like commodities like silver and gold, there is only a limited supply. Only 21,000,000 of these extremely complex algorithms were produced. No more, no less. It cannot be changed by printing more of it, any more than the government prints more money to pump up the system without support. Or by the bank changing the digital ledger, something the Federal Reserve will instruct banks to do to adjust for inflation.

Cryptocurrency is a means of buying, selling and investing that completely avoids government oversight and banking systems that monitor the movement of your money. In a world economy that is destabilized, this system can become a stabilizing force.

Cryptocurrency also gives you a great deal of anonymity. Unfortunately, this can lead to misuse by the criminal element who use cryptocurrency for their own ends, just as regular money can be misused. However, it can also prevent the government from tracking your every purchase and invade your personal privacy.

Cryptocurrency comes in several forms. Bitcoin was the first and is the standard by which all other cryptocurrencies are built. All are produced by meticulous alpha-numeric calculations from a complex coding tool. Some other cryptocurrencies are Litecoin, Namecoin, Peercoin, Dogecoin and Worldcoin to name a few. They are called altcoins as a generalized name. The prices of each are regulated by the supply of a particular cryptocurrency and the demand that the market has for that currency.

The way cryptocurrency came to be is quite fascinating. Unlike gold, which has to be mined from the ground, cryptocurrency is just an entry in a virtual ledger that is stored in various computers around the world. These entries must be ‘mined’ using mathematical algorithms. Individual users or, more likely, a group of users perform computational analysis to find specific series of data, called blocks. ‘Miners’ find data that produces the correct pattern for a cryptographic algorithm. At that point it is applied to the series and they have found the block. After the equivalent series of data on the block is matched by the algorithm, the data block is unencrypted. The miner receives a reward of a certain amount of cryptocurrency. As time passes, the reward amount decreases as the cryptocurrency becomes smaller. In addition, the complexity of algorithms in search of new blocks has increased. Computationally, it becomes more difficult to find a matching string. Both of these scenarios come together to reduce the speed of cryptocurrency creation. This mimics the difficulty and scarcity of mining a commodity like gold.

Now, anyone can be a miner. Bitcoin’s originators made the mining tool open source, so it’s free for anyone to use. However, the computers they use run 24 hours a day, seven days a week. The algorithms are extremely complex and the CPU works at full tilt. Many users have specialized computers built specifically for cryptocurrency mining. Both the user and the specialized computer are called miners.

Miners (human) also keep transaction ledgers and act as auditors, so the coin is not duplicated in any way. This prevents system hacking and rabies. They are paid for this work by receiving new cryptocurrency every week as they maintain their work. They store their cryptocurrency in specialized files on their computers or other personal devices. These files are called wallets.

Let’s recap by going through a few definitions we’ve learned:

• Cryptocurrency: electronic currency; also called digital currency.

• Fiat money: any legal tender; with state support, it is used in the banking system.

• Bitcoin: the original and gold standard of cryptocurrency.

• Altcoin: other cryptocurrencies that are based on the same processes as Bitcoin, but with slight variations in their coding.

• Miners: an individual or a group of individuals who use their own resources (computers, electricity, space) to mine digital coins.

o Also a specialized computer built specifically to find new coins through a computer series of algorithms.

• Wallet: a small file on your computer where you store your digital money.

Conceptualizing cryptocurrency systems in a nutshell:

• Electronic money.

• Miners are individuals who use their own resources to find coins.

• A stable, finite currency system. For example, there are only 21,000,000 Bitcoins ever produced.

• It does not require the government or the bank to do so.

• The price is decided by the amount of coins found and used combined with the public’s demand to own them.

• There are several forms of cryptocurrency, Bitcoin being the first.

• It can bring great wealth, but, like any investment, it carries risks.

Most people find the concept of cryptocurrency fascinating. It’s a new field that could be the next gold mine for many of them. If you find that cryptocurrency is something you’d like to learn more about, then you’ve found the right report. However, I have barely scratched the surface in this report. There is much, much more to cryptocurrency than what I have gone through here.

Tips to Avoid Common Mistakes New Bitcoin Traders Make

Investors from all over the world are trying to cash in on the volatile Forex market by trading the cryptocurrency Bitcoin. Well, it’s pretty easy to get started with online trading, but it’s important to know that there are risks that you can’t afford to overlook.

As with any speculative or stock markets, Bitcoin trading is also a difficult endeavor, which can cost you a lot of money, especially if you don’t get it right. Therefore, it is important that you know about the risks involved, before you decide to start doing it.

If you are a beginner, who is interested in trading Bitcoin, then you will first need to understand the basics of trading and investing.

Avoid common mistakes that new traders tend to make

Invest wisely

Any kind of financial investment can bring losses, instead of profits. Similarly, with the highly volatile Bitcoin market, you can expect both profits and losses. It’s all about making the right decisions at the right time.

Most beginners tend to lose money by making wrong decisions that are mostly driven by greed and poor analytical skills. Experts say that you should not venture into trading unless you are prepared to lose money. Basically, such an approach helps you mentally cope with the worst possibilities.

Diversify your portfolio

First, successful traders diversify their portfolios. Risk exposure increases if most of your funds are allocated to one asset. It becomes more difficult for you to cover losses from other assets. You cannot afford to lose more money than you have invested, so avoid putting more funds in limited assets. This will help you to sustain negative trades to a considerable extent.

Second, investing more money than you can afford will also cloud your rational decision-making abilities. In most cases, you will be forced to opt for a ‘desperate sell’ when the market dips a bit. Instead of holding the market down, the investor who has invested too much in the trade has to panic. A person will feel the urge to sell the property at a low price in an attempt to cut losses.

You will also lose more money when the market recovers. This is because you will have to buy the same retention but at a higher price.

Set goals – Emotions make you blind

Setting goals for each transaction is vital when trading bitcoins. It helps you stay calm even in extremely volatile conditions. Therefore, you will need to set a price first to stop losses.

The same rule applies to profit, especially if you let your greed take over. The advantage of setting goals is that you can easily avoid making decisions based on emotions.

Instead, you should work on improving your chart reading and market analysis skills. It is also advisable for new traders to close their losses within 24 hours, so as not to pay recurring interest.

Crypto TREND 2017-01

Everyone has heard how Bitcoin and other cryptocurrencies have made millionaires out of those who bought a year ago. Profits of 1000% or more are not only possible, but common for many of these cryptocurrencies. Someone who bought Bitcoin in May 2016 for less than $500 would have a 1,400% gain in about 17 months. Then in the past few days we have seen Bitcoin lose almost $1,000, so it would be hard to say that these cryptocurrencies are unstable.

Since Bitcoin’s inception in 2008, we at Trend News have been skeptical of cryptocurrencies’ ability to survive, given that they pose a very clear threat to governments that want to see and tax all transactions. But while we may still be wary of actual cryptocurrencies, we are very aware of the potential of the underlying technology that powers these electronic currencies. In fact, we believe this technology will be a significant disruption in data management and will affect every sector of the global economy, much like the Internet has affected media.

Here are some questions and answers to get you started…

Q: What are cryptocurrencies?

The most famous cryptocurrency (CC) is BITCOIN. It was the first CC, launched in 2008. Today there are more than 800 CCs, including Ethereum, Litecoin, Dash, Zcash, Ripple, Monero, and they are all “virtual”. There are no “physical” coins or currency.

Q: How do CCs work?

CCs are virtual currencies that exist in very large distributed databases. These databases use BLOCKCHAIN ​​technology. Because each Blockchain database is widely distributed, it is considered immune to hacking, as there is no central point of attack and every transaction is visible to everyone on the network. Each CC has a group of administrators, often called “miners”, who validate transactions. One CC called Ethereum uses “smart contracts” to validate transactions. Crypto TREND will provide more details in the next news.


Blockchain is the technology that underpins all CCs. Each transaction to buy, sell or exchange CC is entered into a BLOCK which is added to the chain. This technology is complex and will not be explained here, but it has the potential to revolutionize the financial services industry, as transactions can be completed quickly and easily, reducing or eliminating fees. The technology is also being tested for application in many other industries.

Q: Are CC exchanges regulated by the government?

Mostly the answer is NO, which for some users is a big attraction of this market. It’s the “wild west” at the moment, but governments in most developed countries are examining this market to decide what regulation might be needed. The big decision is whether to treat CC as a currency or a commodity/security. Canada and the US have so far declared CCs to be legal, however the situation remains fluid in terms of reporting and tax implications. Crypto TREND will monitor and report on these developments.

Q: How do I invest in this market?

You can buy, sell and exchange CC using the services of specialized “Exchanges” that act as brokerage. You start by choosing an exchange, setting up an account, and transferring fiat currency to your account. You can then place your BUY and SELL CC orders. There are many exchanges around the world. Opening an account is quite simple and all these exchanges have their own rules about initial funding and withdrawals.

Crypto TREND will recommend CC exchanges in the future.

Q: Where do I store my CC?

To have the freedom to move your cryptocurrencies and pay your bills, you will need to have a digital wallet. These wallets come in several formats, such as desktop, cloud-based, hardware (USB), mobile and paper. Many of them are FREE, however, security is a big factor as no one ever wants to lose their wallet or have it stolen. Crypto TREND will recommend digital wallets in the future.

Q: What can I do with my CC?

In addition to investing in CC products, you can also use cryptocurrency for some financial transactions, such as money transfers and bill payments. The list of companies accepting cryptocurrencies is growing rapidly and includes major players such as Microsoft, GAP, JC Penny, Expedia, Shopify, Bloomberg.com, Dish Network, Zynga, Subway and WordPress.

Q: What’s next?

In the beginning, we will keep each Crypto TREND article short and keep the scope of each one as narrow as possible. As we mentioned earlier, we believe that cryptocurrency technology will be a game changer and that potential investment opportunities like this will come around once or twice in a lifetime. Make no mistake, an early investment in this sector will only be for your most speculative capital, money you can afford to lose.

Even if you don’t want to invest right now, understanding this new disruptive technology early will put you in a good position to profit from our recommendations as we move forward.

Expect to see more news and specific recommendations from Crypto TREND as we begin this journey into what may at first seem like a foreign jungle. This is a volatile market and may not appeal to all investors, however, Crypto TREND will be your guide if and when you are ready.

Stay Tuned!

Preparing for the Cryptocurrency World: China Edition

In the past year, the cryptocurrency market has endured a series of heavy blows from the Chinese government. The market has taken hits like a warrior, but the combinations have taken their toll on many cryptocurrency investors. The market’s underperformance in 2018 pales in comparison to 2017’s stellar 1,000 percent gain.

That what happened?

The Chinese government has taken measures to regulate cryptocurrency since 2013, but nothing compared to what was imposed in 2017. (See this article for a detailed analysis of the official notice from the Chinese government)

2017 has been a busy year for the cryptocurrency market with all the attention and growth it has achieved. Extreme price volatility has forced the Central Bank to adopt more extreme measures, including banning initial coin offerings (ICOs) and cracking down on domestic cryptocurrency exchanges. Soon after, mining factories in China were forced to close, citing excessive electricity consumption. Many stock exchanges and factories have moved overseas to avoid regulations, but remain accessible to Chinese investors. However, they still do not manage to escape from the clutches of the Chinese dragon.

In the latest series of government efforts to monitor and ban cryptocurrency trading among Chinese investors, China has expanded its “Eagle Eye” to monitor foreign cryptocurrency exchanges. Companies and bank accounts suspected of transacting with foreign crypto-exchanges and related activities are subject to measures ranging from restricting withdrawal limits to account freezes. There are even rumors among the Chinese community of more extreme measures to be applied to foreign platforms that allow trading among Chinese investors.

“As for whether there will be further regulatory measures, we will have to wait for orders from higher authorities. Excerpts from an interview with the team leader of China’s Public Information Network Security Supervision Agency under the Ministry of Public Security, February 28


Imagine your child investing their savings in a digital product (in this case, cryptocurrency) that has no way to verify its authenticity and value. He or she could get lucky and strike it rich, or lose everything when the crypto-bubble bursts. Now expand that to millions of Chinese citizens and we’re talking billions of Chinese yuan.

The market is full of scams and pointless ICOs. (I’m sure you’ve heard the news about people sending coins to random addresses with the promise of doubling their investment and ICOs that just don’t make sense). Many unreasonable investors are in it for the money and could care less about the technology and innovation behind it. The value of many cryptocurrencies is derived from market speculation. During the crypto-boom of 2017, participate in any ICO with a well-known advisor, promising team or decent hype and you are guaranteed at least 3x of your investment.

A lack of understanding of the firm and the technology behind it, combined with the proliferation of ICOs, is a recipe for disaster. Central Bank members report that nearly 90% of ICOs are fraudulent or involve illegal fundraising. In my opinion, the Chinese government wants to ensure that cryptocurrency remains ‘controlled’ and does not become too big to fail within the Chinese community. China is taking the right steps towards a safer, more regulated cryptocurrency world, albeit an aggressive and controversial one. In fact, it might be the best move the country has made in decades.

Will China issue an ultimatum and make cryptocurrency illegal? I doubt it because it’s a pretty pointless thing to do. Currently, financial institutions are prohibited from holding any crypto-assets, while individuals are permitted but prohibited from conducting any forms of trading.

A government cryptocurrency exchange?

At the annual “Two Sessions” (named because the two main parties – the National People’s Congress (NPC) and the National Committee of the Chinese People’s Political Consultative Conference (CPCC) participate in the forum)held in the first week of March), leaders gather to discuss the latest issues and made the necessary changes to the law.

Wang Pengjie, a member of the NPCC, addressed the prospect of a state-owned digital asset trading platform, as well as initiated educational projects on blockchain and cryptocurrency in China. However, the proposed platform would require an authenticated account to allow trading.

“With the establishment of related regulations and the cooperation of the People’s Bank of China (PBoC) and the China Securities Regulatory Commission (CSRC), a regulated and efficient cryptocurrency exchange platform would serve as a formal way for companies to raise funds (through ICOs) and investors to retain their digital assets and achieve capital appreciation” Presented by Wang Pengjie in two sessions.

March to Blockchain Nation

Governments and central banks around the world have struggled to cope with the growing popularity of cryptocurrencies; but one thing is for sure, everyone has embraced blockchain.

Despite the crackdown on cryptocurrencies, blockchain is gaining popularity and acceptance at various levels. The Chinese government supports blockchain initiatives and embraces the technology. In fact, the People’s Bank of China (PBoC) is working on digital currency and conducting fraudulent transactions with some of the country’s commercial banks. It has not yet been confirmed whether the digital currency will be decentralized and offer cryptocurrency features such as anonymity and immutability. It wouldn’t be a surprise if it turns out to be just a digital Chinese Yuan since anonymity is the last thing China wants in its country. However, created as a close replacement for the Chinese yuan, the digital currency will be subject to existing monetary policies and laws.

Governor of the People’s Bank of China, Zhou Xiaochuan. Source: CNBC

“Many cryptocurrencies have experienced explosive growth which can bring a significant negative impact on consumers and retail investors. We do not like products (cryptocurrencies) that use a huge opportunity for speculation that give people the illusion of getting rich overnight” Extract from Zhou Xiaochuan interview on Friday, 9 March.

In a media appearance on Friday, March 9, People’s Bank of China Governor Zhou Xiaochuan criticized cryptocurrency projects that used the crypto-boom to cash in and fuel market speculation. He also noted that the development of digital currency is ‘technologically inevitable’

At the regional level, many Chinese cities are launching blockchain initiatives to promote growth in their region. Hangzhou, famous for being the headquarters of Alibaba, has listed blockchain technology as one of the city’s top priorities in 2018. The local government in Chengdu city has also been proposed to build an incubation center to encourage the adoption of blockchain technology in the city’s financial services.

Local conglomerates such as Tencent and Alibaba have also partnered with blockchain firms or launched projects of their own. Blockchain firms such as VeChain have also secured multiple partnerships with Chinese firms to improve supply chain transparency in China.

All clues point to the fact that China is working on a blockchain nation. China has always had an open mentality towards new technologies such as mobile payments and artificial intelligence. From now on, no doubt China will be the first blockchain-enabled country. Will we see the Chinese government back down and let its citizens trade again? Probably, when the market matures and becomes less volatile, but definitely not in 2018.

Stages of market mania

What is mania? It is defined as a mental illness characterized by high excitement, euphoria, delusions and excessive activity. In investing, this translates into investment decisions that are driven by fear and greed, unmitigated by analysis, reason, or risk-reward balance. The mania usually runs parallel to the business development of the product, but the timing can sometimes go wrong.

The technology.com boom of the late 90s and today’s cryptocurrency boom are two examples of how mania works in real time. These two events will be highlighted with each stage in this article.

Idea phase

The first phase of mania begins with a great idea. The idea is not yet known to many, but the potential for profit is huge. This usually translates to unlimited earnings, because “something like this has never been done before”. The Internet was one such case. People who used paper systems of the time were skeptical as “how can the internet replace such a well-known and entrenched system?” The backbone of the idea begins to be built. This translated into the modems, servers, software and websites needed to turn the idea into something tangible. Investments in the idea stage start off without a splash and are made by people who are “in the know”. In that case, it can be visionaries and people working on the project.

In the world of cryptocurrencies, the same question arises: How can a piece of crypto code replace our monetary system, contract system and payment systems?


The first websites were crude, limited, slow and boring. Skeptics would look at the words “information superhighway” uttered by the visionaries and say “how can this really be so useful?” The forgotten element here is that ideas start out worst and then evolve into something better and better. This sometimes happens because of better technology, higher volume and cheaper costs, better applications for the product in question, or better product knowledge combined with great marketing. On the investment side, early adopters are getting involved, but there is still no euphoria and astronomical returns. In some cases, the investments have yielded decent returns, but not enough to make the masses jump on board. This is analogous to slow internet connections from the 1990s, crashing websites or incorrect information on search engines. In the world of cryptocurrencies, this is evidenced by the high cost of mining coins, slow transaction times, and account hacking or theft.

The Acceleration

Word is starting to get out that this internet and “.com” is the hottest new thing. Products and tangibility are being constructed, but due to the sheer scale involved, the cost and time involved would be enormous before everyone uses them. The investment side of the equation begins to progress in business development as markets discount the potential of the business with the cost of the investment. Euphoria is starting to materialize, but only among early adopters. This is happening in the cryptocurrency world with the explosion of new “altcoins”, and the huge media press the space is getting.


This phase is dominated by parabolic returns and the potential that the Internet offers. Not much thought is given to implementation or issues because “the returns are huge and I don’t want to miss them”. The words “irrational exuberance” and “mania” are starting to become commonplace as people buy out of sheer greed. Bad risks and negatives are mostly ignored. Symptoms of the mania include: Every company with a.com in its name is red hot, analysis is thrown out the window in favor of optics, investment knowledge is becoming less visible among new entrants, expectations for 10 or 100 returns are common and few people actually know how the product works or does not work. This played out in the world of cryptocurrencies with stellar returns in late 2017 and incidents where companies’ shares rose hundreds of percentage points using “blockchain” in their name. There are also “reverse takeover offers” where listed but dormant shell companies are renamed to something that includes blockchain and the shares are suddenly actively traded.

Crash and Burn

The business scene for new product is changing, but not nearly as fast as the investment scene is changing. Eventually a change in mindset occurs and the big sell begins. Volatility is huge, and many “weak hands” have been wiped out of the market. Suddenly the analysis is being used again to justify that these companies have no value or are “overvalued”. Fear is spreading and prices are falling rapidly. Companies that have no profit and survive on hype and future prospects are blown up. Incidents of fraud and scams increasing to exploit greed have been exposed, causing more fear and a sell-off in securities. Companies with money quietly invest in a new product, but the rate of progress slows because the new product is an “ugly word” unless profits are convincingly demonstrated. This is starting to happen in the cryptocurrency world with overlapping lending schemes using cryptocurrencies and more frequent incidents of coin theft. Some of the marginal coins fall in value due to their speculative nature.

The Survivors

At this stage, the investment landscape is littered with stories of losses and bad experiences. Meanwhile, a great idea becomes tangible and for the companies that use it, it’s a boom. It begins to be implemented in everyday activities. The product is starting to become the standard and visionaries are quoted as saying that the “information superhighway” is real. The average user notices an improvement in the product and mass adoption begins. Companies that had a real profit strategy were hit during the crash and burn phase, but if they have the money to survive, they make it to the next wave. This has not happened yet in the cryptocurrency world. The expected survivors are those with a tangible business case and corporate backing – but it remains to be seen which companies and coins those will be.

The next wave – The business reaches popularity

At this stage, the new product is the standard and the profit becomes obvious. The business case is now based on earnings and volume, not the idea. A second wave of investment is emerging starting with these survivors and expanding into another early stage mania. The next phase was marked by social networks, search engines and online shopping, all of which are derivatives of the original product – the Internet.


Manias work in a pattern that plays out in a similar way over time. Once you recognize the stages and the thought process in each one, it becomes easier to understand what’s going on and your investment decisions become clearer.