16
Jun

[Trading] A bloodbath or “tokens-for-sale”?

Yesterday was a bloodbath for cryptocurrencies: more or less $5 mld were burned by a giant wave of panic selling.

For this we have to thank the Bitcoin Community: if you are not a “truly-believer”, why you should ever keep a coin, that before being a coin is a software, and its developers are in a war about its future with the chance of a chain split?

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Anyway, it’s clear that this bloodbath was due to:

  1. A physiological price correction: short and day traders and speculators have to concretize their profit.
  2. Bitcoin’s debate: uncertainty is the enemy of every long-term investor, and the risk of a fork scares speculators.

Anyway, since we love economy, trading, and cryptocurrencies, and we love to think that we trade without emotions, yesterday we decided to open some beers and imagine that it was a “24hrs special sale”.

Some months ago we made the decision to keep some FIAT currency on some exchanges to be ready in these moments. It’s a risk, and you should NEVER keep funds on the exchange more than needed, anyway we thought that the possible gain was higher than the risk so here we are.

During these days we decided to focus on 3 tokens:

  1. Ethereum (ETH): it’s not a secret that we love Ethereum, and the ecosystem around it. It’s fast and cheap (for the moment) and it has a good and efficient governance. The only point that keeps us from investing massively on Ethereum is that we are still not sure that it’s better than other alternatives as a payment system. To be clear, actually is perfect: is fast, cheap and safe. Anyway, Ether (the token of Ethereum Network) was not developed to be a payment system, but a way to pay fees of Smart Contracts. Inflation and scalability are two points that in the nearly future (next 12 months)  have to be discussed by devs to decide the eth future: it will be a payment and “digital gold” token or it will remain only a way to pay Smart Contract Gas?
  2. Litecoin (LTC): we discussed previously the great potential of Litecoin, and our idea remains the same. Litecoin have the skills to be the best payment token out there: SegWit already activated and working, Lighting Network under development, no governance problem (so decision are made faster) and Charles Lee as a full-time developer. The number of daily transactions goes on increasing and this is an important aspect to watch when you try to determinate the value of a token.
  3. ZCash (ZEC): like Litecoin, Zcash has the skills to be a leader of crypto-payments in the future. At the moment it still in its early stage, the adoption is like inexistent, same on daily transaction number (less than 5000 transactions per day). The great price increase of the last days show the trust of the markets, but in the real life, it’s still not used. Anyway, for long term investment, we are sure that Zcash will be an important token, so we decided to start buying.

Yesterday we saved more or less 40% on purchasing Litecoin, Ethereum and Zec. We decided to split our funds in this way:

  • 60% –  Ethereum

ETH/EUR CHART

eth eur price

(from coinigy.com)

ETH/USD CHART

usd eth price chart

(from coinigy.com)

Like you can see in the charts above, ethereum is slowlyng coming back rising, and even if someother fall will be in the nearly future (oh, yes, they will) we are pretty sure that at the moment ETH is a valid investmen.

  • 30% – Litecoin

LTC/EUR CHART

LTC EUR PRICE CHART

(from coinigy.com)

LTC/USD CHART

LTC/USD CHART

(from coinigy.com)

During this bloodbath, Litecoin was one of the strongest Coin: it resisted loosing only 8-9% and it has already gained what it lost yesterday.

  • 10% – Zcash

ZEC/EUR CHART

ZEC/EUR CHART

(from coinigy.com)

ZEC/USD CHART

ZEC/USD PRICE CHART

(from coinigy.com)

Zcash is the most unpredictable: due its young age, low in chain transactions volume and low adoption in every day life, the outcome of speculations movement like yesterday can’t be predicted. This is why we invested only 10% of our fiat funds.

Like you can see, no investment was a mistake, but we could double our profit if we decided to point on Zcash only.

Anyway, yesterday we had the proof that the most part of the traders, when sell simply hold fiat currency on the exchange, and only a small part com back to banks. This means that the market crash can easily (and fastly) turn into a bullish movement.

That’s it for now, let’s see what will be.

 

And you? What did you do during yesterday’ bloodbath?

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