When it comes to cryptocurrencies, ignore the charts and study the fundamentals – EzAnime.net

When it comes to cryptocurrencies, ignore the charts and study the fundamentals – EzAnime.net

An interesting graphic appeared on my desk about six weeks ago, and it was clearly intended for scare crypto investors.

The graph (attached below) shows that the Bitcoin boom of 2020 and the subsequent crash in 2021 (gray line) tracks almost identically the previous Bitcoin boom-bust cycle of 2017/18 (blue line).

The implication is that, just like they did during the second half of 2018 and 2019, Bitcoin prices will continue to collapse in the second half of 2021 and into 2022.

At first glance, that graph is scary. I mean… look how closely those gray and blue lines follow. It is unmistakable. And strange.

But this chart was made six weeks ago. And what has happened since then? Bitcoin prices have skyrocketed! At the time this chart was made, Bitcoin prices were hovering around $ 30,000. But last week, Bitcoin was above $ 50,000.

So far that correlation! Unlike the mid-2021 crash in Bitcoin, we got a mid-2021 surge in cryptocurrencies.

And that gets to the most important point. This chart, and most crypto charts, for that matter, is complete false.

Cryptocurrencies are not on rails

Have you ever heard the phrase «correlation is not equal to causality“? It is a saying derived from the scientific community to emphasize that just because two things correlate with each other, that does not at all imply that there is some kind of cause and effect relationship between those two things.

Because the reality is that when you stack two wavy lines side by side and play chartist to adjust the time frames, you will be able to correlate almost two things in the world and often that correlation is going to disappear. be completely random, insignificant, and without sense.

Example: The number of people who drowned when falling into a pool. correlates closely with the number of films in which Nicolas Cage appeared – I don’t think anyone here can argue that the two are related. It is a completely random coincidence.

Another example: Cheese consumption per capita correlates closely with the number of people who died from becoming entangled in their sheets. A morbid correlation, for sure. But significant or significant? No. Just random.

And another example: the divorce rate in Maine correlates closely with per capita consumption of margarine. Again, random and insignificant.

I could go on and on. But the point is clear. Correlation is not equal to causality, and just because two wavy lines line up with each other, it doesn’t mean anything …

So my advice on the chart I showed you to start this number is simple: Forget it!

In fact, you should ignore all charts when it comes to cryptocurrencies, because the fact is that charts will not determine the long-term value of Bitcoin, Ethereum, or Cardano, the underlying blockchain fundamentals of each of those. Coins will determine how high (or low) those coins are going to go over the next five to 10 years.

Spoiler alert: They will go higher. Much higher.

The soaring future of cryptocurrencies

This is because cryptocurrencies have the potential to, in the long run, disintermediate multi-billion dollar economic systems and make them freer, fairer, and faster.

Simply put, humans are not trustworthy by nature. That is just a fact of life. We all have different motivations, incentives, and goals. So, to create trustworthy systems from innately untrustworthy people, humans have for thousands of years relied on a central arbiter to provide control and order … in exchange for our money, freedom, or sometimes both.

Cryptocurrencies allow us to replace those central arbiters with a technology, a software platform, that provides control and order, and allows untrusted people to create trustworthy systems, without asking for money, freedom or anything in return.

They do so thanks to a centralized, immutable and carefully constructed system. ledger that aligns the financial incentives of the participants in a system to always act in the best interest of the system, not oneself.

It is this realignment of incentive structures that makes cryptocurrencies so profound. Makes humans untrustworthy, trustworthy… And it allows us to create reliable economic systems without an intermediary charging a fee, or biasing against certain people, or taking the time to review transactions.

Cryptocurrencies will really allow us to create freer, fairer and faster economic systems.

We will replace Facebook with a blockchain social media platform that does not require your data to monetize the platform …

We will replace YouTube with a blockchain streaming platform that doesn’t need to serve you ads with all the videos to stay up and running …

We will replace Verizon with a blockchain telecommunications infrastructure that will give you free cell coverage wherever you go …

We will replace Bank of America with a blockchain finance application that will allow you to send, receive and store money, for free …

That is the fundamental backdrop for cryptocurrencies..

The bottom line

I don’t care what the charts say. I don’t care which wavy lines correlate with which wavy lines.

I am concerned about the fundamentals of blockchain technology because it is those fundamentals that will determine the long-term value of Bitcoin and other cryptocurrencies.

If that’s what you care about too, then don’t forget to tune in on Wednesday night at 7pm ET when I’ll be sitting down with my colleague and legendary Bitcoin investor Charlie Shrem at our first event. cryptographic code event.

The topic of our discussion? As the name implies, we are going to talk about the secret “code” behind all cryptocurrencies, and why this code is pretty much all that matters when it comes to whether you have a winning crypto … or a losing crypto.

Better yet, we will inform you about our proprietary quantitative system for cracking this code that has enabled our team to create a cryptocurrency portfolio that is up to a staggering 760%!

Sound like a must see event? That’s exactly what it is: a must see event.

So don’t miss it! Click here to reserve your seat now and start your journey to great returns in the crypto market by paying attention to the right things and forgetting about all the noise.

PS: Did you hear? Last week, The Savior He did something extraordinary… something unprecedented… and something that could be a sign of the future.

The country officially made Bitcoin legal tender.

The news was almost lost in the market panic that preceded the legislation, as the cryptocurrency market suffered a ‘sudden crash’ just hours before the official announcement.

I’ll talk more about this meaning of this in tomorrow’s essay. Until then, be sure to stay up-to-date with our daily essays for more context on our crypto code event on Wednesday, September 15 at 7pm ET.

As of the publication date, Luke Lango did not hold (directly or indirectly) any position in the securities mentioned in this article.

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When it comes to cryptocurrencies, ignore the charts and study the fundamentals – EzAnime.net