Sentiment in ethereum trading places has turned worse than it perhaps has ever been. Even during the Slockit DAO affair they were slightly more cheerful.
Perhaps with good reason. While price then fell from $20 t0 $5, this time it has fallen from $1420 to a current price of around $430.
Somewhat less in percentages, but considerably more in sums and, if we take the low of $360, it is slightly more in percentages too.
So while they had hope, now it appears they have none. Even a long term bull has apparently turned bear. Preaching to the congregation, he says:
“This overall market is not driven by fundamentals in a meaningful way right now. It is driven by hype, that feeds off of itself and news.”
That’s, of course, the theme of the mainstream media. It’s all a bubble, it’s all hype, or worse. Some billionaire who wants your money to fatten his stock holdings said this, some banker who wants your money in fees said that.
In a price action like we’ve seen, some previously blind bulls will of course become blind bears, perhaps temporarily.
The trick is simple. You see all that is a minus, and you ignore from your purview all that is a plus, and feel like perhaps you’ve just woken up from a trance.
And then, if you are smart enough, you ask: but wait, isn’t there something here, or here, or perhaps in this aspect. Ok that use there might have some problems, but could it work. This one here though… yes maybe we lost our way a bit but…
Thing is, if cryptos could die they would have done so in 2011. The sentiment right now is like hearing birds sing next to a fountain compared to then. All left. If cryptos being dead means anything, then bitcoin was pretty much dead.
Yet it rose from the ashes. What is dead can not die, can it? How can a global network that allows for instant transfer of value anywhere in the globe for pretty much free be dead? How can a trustless digital asset be a bubble? How can the vision of a new world be hype?
Would we rather have kings again who dictate how much our money is worth? Something like the EOS arbitrator? That’s what central banks effectively are. Three trillion dollars just in America they have created out of nothing. That will need to be multiplied considerably for 90% of all money creation is by commercial banks, with just four of them accounting for 90% of that in turn.
In light of such clear potential for abuse, which arguably is being abused and probably always will, a unit of account like cryptos needs effectively do nothing to gain against the abused unit of account.
That has been the case even in the current state of cryptos. First generations in such breakthrough of course need much honing down, and the main one where price is concerned is miners.
We don’t undertake academic studies, but observational science is not limited to those. One can observe most other assets tend to go up gradually, and then crash in fiat mismanagement but in line with productivity growth they should still keep a straight line.
Cryptos so far have had such line, yet within a period of around four months they tend to go up considerably and then down considerably.
Mania could perhaps explain that in part, just as money printing could perhaps explain stocks not experiencing the same as often, but the considerable new crypto money supply through miners is probably also part of the equation.
There has been no public blockchain which one can say is sound that has utilized a security method through savers validating, called stakers in Proof of Stake in technical jargon.
That being, instead of individuals needing to go out and buy hardware or electricity with fiat, then gain bitcoins, sell them to cover the hardware/electricity or gain new ones, you can have individuals who have eth lock them in a savings account and act as a verifying node with say in the network.
Had Nakamoto stood around, he probably would have appreciated the refinement because for him the problem would have been how to distribute the coins, yet once they are distributed, one should think there is no reason why the coins themselves can’t validate all matters and effectively clear as well as settle transactions.
That should address some of the downwards selling pressure from miners and might perhaps change this bulls becoming bears and bears becoming bulls cycle. A cycle that is the very first time in crypto history to occur without a black swan event for bitcoin.
That could mean the opposite of what the bull now bear says is true, at least where the time frame is a bit longer than hours or days. Because if such cycles are happening with black swans and without black swans, then fundamentals are perhaps the only thing that matters.
And where fundamentals are concerned, confidence in the technology has never been higher. While even recently we could say this is all an experiment, the set up of people all over the world downloading a node software that processes all these payments without a third party works to the point of perhaps no reasonable doubt.
That networked code is a very new thing, and where that new thing will go, we’ll have to see, but we’d be amiss in the meantime to not enjoy the valley of despair for soon enough we may get as fed up with it as the December euphoria.