CyclePro Outlook

Fundamental and Technical Market Analysis
For All Markets: Stocks, Commodities, Currencies, Cryptocurrencies

Updated At Irregular Intervals


I would rather be prepared and wrong
than to be unprepared but right!

Current Commentary -- Where Are We Now?

Saturday, August 12, 2017 10PM:

War Drums Spark Cryptocurrency Activity as Bitcoin Reaches $4000

The chart below shows the value (in USD) of the activity in the cryptocurrency markets over the past several days. I am drawing a basic assumption that most investors are buying using their native currencies. However, I am sure there are plenty of people around the world that are transacting in USD regardless where they are located.

Today (12 August 2017), has seen a huge increase in buying from Japan, China, and S. Korea. Relative to recent days, even India has shown a sharp increase largely due to the tension along its border with China.

With fears of an unstable leader teetering on whether to start a nuclear war (perhaps equally applied to Kim Jong Un or Donald Trump) countries directly in the path of ICBMs are showing the most increased activity with cryptocurrencies. It seems these digital currencies are substituting for traditional hedges, such as gold & silver. This is probably because currency trading is available anytime 24/7 while precious metals have specific marketplaces and are cumbersome to transport, store, and secure.

We are witnessing a dynamic paradigm shift in the way people are hedging or protecting their wealth during tense and uncertain times.

Here are the currencies that are getting the most activity. Bitcoin continues to dominate while Ethereum is s distant second place in China and US. Surprisingly, Ripple is showing some fair activity in Europe. All of the other currencies are much less popular. Please note that of the 1200 or so cryptocurrencies currently in existence, when times get serious, only a handful of these currencies are actually considered by investors. The other 99% of these currencies are little more than speculative toys, from which very few will emerge over the next few years with any viability -- as I have stated previously, the remaining 98-99% will likely end up worthless.

Another observation with this data is that currencies like Zcash, which is promoted for its extreme level of privacy, is only getting minor use. I guess when times get truly serious, privacy is far less of a concern than the superior liquidity that a currency like Bitcoin provides.

All values in this chart have been converted to USD

Click chart to enlarge.

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