The Most Important “Crypto FUD” Bitcoin Investors Need To Know Transitioning From 2018 To 2019
The Most Important Crypto FUD You Need To Know About Over The Next 4 Weeks
Fear, uncertainty, and doubt has played a huge role in crypto markets since the beginning of time. Intelligent investors need to spot potential sources of FUD before they hit the internet.
That’s exactly what the team at Trading Room did earlier this week. On December 3, Trading Room tweeted the potential sources of crypto FUD over the next 3 to 4 weeks. Although FUD is typically negative, Trading Room mentions both positive and negative news stories that could affect crypto over the coming weeks.
Trading Room is a crypto trading app developer based in Geneva. The company’s Twitter frequently features trading tips for crypto users. So where does Trading Room feel the next sources of FUD will come from? Keep reading to find out.
Positive Crypto News Expected Over The Next 4 Weeks
Trading Room mentions Bakkt, the VanEck ETF, and institutional buying as some of the positive crypto news stories that could take place over the next 4 weeks.
Bakkt: Bakkt is scheduled to launch at the end of January 2019. The platform was originally scheduled to launch in November 2018 but the launch was pushed back. Bakkt is a crypto exchange platform that aims to bring added legitimacy and transparency to the crypto space. Of course, many exchanges make similar promises, but few exchanges come with the backing of Bakkt. Bakkt’s parent company is ICE, the same parent company of the New York Stock Exchange. Bakkt also has the support of Starbucks, Microsoft, and other major American corporations. Bakkt will introduce bitcoin futures trading and other contracts, helping to facilitate effective price discovery in crypto and possibly paving the way for a bitcoin ETF.
The VanEck/SolidX Bitcoin Trust ETF: The VanEck/SolidX Bitcoin Trust ETF is the most promising exchange traded fund in the crypto space. It first appeared on the SEC agenda last summer. The SEC postponed the decision on the ETF until January, however. To date, the SEC has denied every bitcoin ETF proposal. All of these ETFs have been rejected due to one similar fear: fear of market manipulation by exchanges and individuals and a lack of protections for individual investors. The launch of Bakkt could solve that problem overnight, potentially paving the way for the VanEck/SolidX Bitcoin Trust ETF.
Institutional Buying: Whether or not the VanEck/SolidX Bitcoin Trust ETF gets approved, there could be increased institutional buying into crypto. The launch of Bakkt will create a safe and secure crypto on-ramp institutions can use to participate in crypto. We often hear about billions of dollars of institutional capital waiting on the sidelines to enter the crypto space That may be true – or it may be overblown. It remains to be seen how much institutional capital – if any – will pour into crypto over the next 4 weeks.
Negative FUD Expected Over The Next 4 Weeks
Fear, uncertainty, and doubt could significantly affect crypto markets over the next few weeks. Some of the negative news stories pointed out by Trading Room include potential exit scams, 51% attacks, mass coin de-listings, and hacks.
Potential Exit Scams for Coins and Exchanges: Trading Room believes a number of coins and exchanges could attempt to pull off exit scams over the next few weeks. An exit scam occurs when a coin or exchange shuts down suddenly, disappearing with everyone’s money. It’s unclear if Trading Room has a specific exchange or coin in mind – like Bitfinex and Tether. However, there’s always a risk of exit scams in the crypto community.
51% Attack: A 51% attack typically occurs against smaller coins. It can be devastating in the early days of a mineable cryptocurrency. Once again, it’s unclear if Trading Room has a specific coin that could be 51% attacked – say, Bitcoin Cash ABC.
Mass De-Listing by Major Exchanges: Major cryptocurrency exchanges have listed hundreds of coins over the last year. Many of these coins are unpopular and virtually useless. Crypto exchanges could start to clean up their orderbooks by de-listing a number of coins outside the top 20 or top 50. However, it’s once again unclear if Trading Room has insider knowledge regarding when a de-listing will take place – or if they’re just guessing.
Hacking: Hacking is a persistent threat in the crypto community. From exchanges to crypto wallets, there’s always a chance that a serious hack could have devastating effects on crypto and create FUD.
Regulatory Actions from the SEC: The SEC is unsure how to regulate crypto. To date, the SEC has not issued clear guidance on crypto. We don’t know if certain cryptocurrencies will be declared securities or if the SEC will take a laissez-faire approach to the industry. Regulatory action from the SEC has been a potential source of FUD for years.
Will The Crypto Bear Market Break Before January 2019?
The negative FUD above doesn’t appear linked to anything specific: these are just general sources of FUD that could be accurate at any point over the last 3 years in the crypto space. Hacking, 51% attacks, exit scams, and SEC regulatory actions have always affected crypto markets.
That’s why the positive news stories are more intriguing: the launch of Bakkt, the approval of a bitcoin ETF, and institutional buying could all catapult crypto into a bull market. All of these things could occur in a short period of time at the end of January 2019.
Overall, Trading Room recommends that users “stay alert and stay away from rumors” and “focus on price action.” FUD is rarely as good or as bad as it seems when the news first breaks, but the markets always overreact anyway.