Archive for the ‘Bitcoins’ Category

Square gets NY State cryptocurrency license for it’s Cash App

Posted on: July 3rd, 2018 by jms No Comments

Photo by Marjan Grabowski on Unsplash

 

Square’s Cash App is a hugely popular app for sending and receiving money, and now New York residents can use the app to buy and sell Bitcoin. According to Square’s website Bitcoin can be traded with no conversion fees, which is nice. Although their exchange rate calculations are not entirely clear. According to Square, the exchange rates are

 

“…calculated using the current market rate across the most popular U.S. exchanges, plus a spread determined by the size of your transaction and market volatility. The exchange rate may differ between transactions, and may also differ from exchange rates available to you from other buyers and sellers of Bitcoin.”

 

To me, this sounds like they will take an average (possibly weighted) price from “popular exchanges” along with a spread based on current buy/sell rates, and use that to come up with a somewhat fair, but also somewhat manipulated price. The average cost calculated with a spread may allow for some sort of arbitrage on the back-end, which is where Square can profit from each transaction. Still, this is another step forward for Bitcoin and cryptocurrencies alike. With companies like Square taking big steps like this to help legitimize and promote cryptocurrencies, it seems the cryptocurrency age is just getting started.

Time to Sell?

Posted on: February 5th, 2018 by jms No Comments

 

I did it… I pulled the trigger and sold my entire position in Bitcoin, Bitcoin Cash, and Ethereum.

 

I was holding off for a while as I watched the price of cryptocurrencies fluctuate a few hundred every day. But I just couldn’t ignore the steady decline over time, so I decided to gamble on the fact that ongoing government regulations and consistent shorting on futures funds is prompting a big sell-off.

 

What’s even worse, the days of using credit as leverage to buy into cryptocurrencies are dying, resulting in a smaller pool of buyers, which can drive prices down even further.

 


 

There is a lot of news circulating that has a lot of bias, and it’s bias on both sides of the spectrum. What I’ve always tried to do when writing my own personal opinions on this topic is to offer a more balanced view. Granted, I am very bias towards favoring Bitcoin and other cryptocurrencies, but I do make a concerned effort to put my personal bias aside for a more balanced look at things. This will not only benefit anyone who reads this, but myself as well, since it forces me to ignore the noise and formulate my own opinions that will ultimately dictate my own actions. And my own opinions say it’s time to sell, especially if you got in early and saw a significant gain over time.

 

I thought about selling when the price was making a push towards $20,000, but I let my cognitive bias get the best of me then. I decided to not let that happen again, since the idea of losing more would border on stupidity in my opinion. If I can walk away with a decent profit, why not? I may have missed an opportunity to sell higher, but I can still sell high, and that’s a good thing.

 

There are many forms of cognitive bias, but the one at play with Bitcoin I think is the idea that we tend to seek out or favor the information that supports what we want to believe, or confirmation bias. In this case I want to believe that the price of Bitcoin will keep going up even as it’s falling, so I’ll trick myself into believing that this is actually the case.

 

I’ll convince myself that tweets from “experts” on the topic telling me to “hodl” (hold) is the right thing to do, even though other experts, like Warren Buffet and Ray Dalio, who I should probably trust more, say that Bitcoin is in a big bubble.

 

I’ll convince myself that news I read from sources like bitcoin.com, or other popular crypto-news sites, have a valid point and aren’t just putting a creative spin on the negative news from other sources.

 

I’ll convince myself that governments starting to crack down on cryptocurrencies won’t really have a significant impact because of a funny meme I saw online like this one…

 

 

(It turns out that some countries can make a significant impact)

 

 

It’s time to get real. Bitcoin is dropping fast and for a number of reasons. All the wishing and positive spins in the world won’t change what’s actually happening. Don’t get me wrong. I’m still a big believer in the technology and ideology, and I’m still long on Bitcoin. But while it’s dropping I’ll take a profit while I can. I’m sure I’ll buy again when prices bottom out, but for now I’ll cash out and cover my gains.

 

My advise to anyone who can sell at a gain is to sell now. Unfortunately, this isn’t the case for everyone. For anyone who can’t sell at a gain I only see 2 options.

 

1) Hold if you can afford to and hope for the best. I do think there will always be value tied to Bitcoin in some way, even if it never climbs back to where it was. Remember that Bitcoin and blockchain technology is still relatively new and evolving, and so it still has a lot of potential. Holding if can afford to is probably not a terrible strategy.

 

2) Cash out and accept your loses. Despite what we may read, cryptocurrencies are a gamble right now. When we place bets we have to be willing to lose sometimes, otherwise we shouldn’t be placing bets. The good news is that most people (governments included) agree that blockchain technology is here to stay and cryptocurrencies, in one way or another, are likely to have a place in the future of trade. So even if you decide to sell at a loss now, there is a good chance you can buy back in later when things level off, and hopefully make a profit then.