CRYPTOCURRENCIES
merger is contingent on a clean- up of the corporate debt, which appears to be almost completed. When closed the market cap of the reverse merger would be over $100 million. Digatrade Financial Corp. (DIGAF) has been around for 2.5 years as a bitcoin exchange based in Vancouver, Canada. DIGAF has a current market cap of $12.6 million.
ICOs
Social Reality Inc. (SRAX) were having an ICO of its big Token in December and hoped to be the first consumer p o w e r e d community that dictates how consumers are advertised to. Interest in the ICO was high.
Price Coupling Beginning
In the past the price movements of bitcoin didn’t have a dramatic effect on the stocks in the bitcoin ecosystem. More recently noticeable moves in bitcoin were translating into moves in the underlying stocks. In theory the bitcoin miners are similar to how gold mining stocks behave when the underlying commodity has a move. It’s not necessarily a dollar for dollar move but the trend
can move the entire sector. Mining stock
should be the most price
sensitive to price movement. Capital equipment suppliers like NVDA are susceptible to a miner’s profitability, which continues to soar. Payment processors benefit from an increase in the volume of transactions.
FX
reflects the potential of the CME Futures contracts for bitcoin and the supply shortages of mining units. If investors take these factors and Moore’s Law into account, it’s not hard to fathom the price increase. Through technology bitcoin has managed to reach even the furthest and most isolated parts of our planet. It’s de c ent r a l ize d which means no government has the power to
stop it or
control it. China certainly tried but the global
network
is seemingly u n s t op p a b l e at this point. Bitcoin thrives
Summary
By now investors should realize that the bitcoin ecosystem is much bigger than one article can address. The central theme is that all these stocks in the bitcoin ecosystem are dependent upon the price of bitcoin. The questions on investor’s mind might be how long can this continue, will the bubble burst, and will I be holding the bag. Hopefully it is clear that bitcoin is no longer a fad and was created to appreciate in price which means the law of supply and demand rules. The recent price action
on distrust of government and its central planning. This is why in the wake of the military coup in Zimbabwe, the price of bitcoin is double the world price. Bitcoin is immune from politics and inherently derives its value from the users and the miners. The reality is blockchain technology is here to stay and basically shows us how we are going to transact with each other in the new digital economy.
Michael Sheikh
Founder of Falcon Strategic Research
Streetwisereports.com
FX TRADER MAGAZINE January - March 2018 39
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